The Hong Kong stock market bounced right back to the upside again on Wednesday, one session after it had halted the two-day winning streak in which it had climbed nearly 620 points or 3.1 percent. The Hang Seng Index finished just below the 19,520-point plateau, and now analysts are forecasting a slightly softer open for the market on Thursday.
The global forecast for the Asian markets is mixed to lower following the Federal Reserve's decision to extend Operation Twist. In the run-up to the FOMC's decision, markets had largely priced in some kind of additional stimulus - and that's what they got, although more was expected. Profit taking may be in order for some of the overbought regional bourses. The European markets were higher and the U.S. markets were mixed but little changed, and the Asian markets are tipped to follow the latter lead.
The Hang Seng finished modestly higher on Wednesday following support from the finance, industry, property and utility sectors.
For the day, the index rose 102.18 points or 0.53 percent to finish at 19,518.85 after trading between 19,469.13 and 19,578.82 on turnover of 41.46 billion Hong Kong dollars.
Among the gainers, HSBC jumped 2.32 percent, while Hang Seng Bank added 0.58 percent, China Construction Bank collected 0.19 percent, Bank of China gathered 0.34 percent, Bank of Communications was up 0.39 percent, Hang Lung Properties added 0.39 percent, Cheung Kong Holding collected 0.38 percent and PetroChina gathered 0.57 percent.
Moving lower, Bank of East Asia shed 1.11 percent, while Sinopec eased 0.14 percent and Hong Kong Exchanges & Clearing fell 0.18 percent.
The lead from Wall Street provides little clarity as stocks saw considerable volatility on Wednesday as traders digested news of the Federal Reserve's decision to extend Operation Twist through the end of the year. Nonetheless, the markets largely held on to their recent gains.
Operation Twist involves replacing short-term securities in the Fed's bond portfolio with longer-term securities in an effort to push already low long-term interest rates even lower. Fed Chairman Ben Bernanke said that the move was a way the central bank could boost the economy even though the most traditional policy action, lowering interest rates, is not available.
Bernanke also noted that like many economic analysts and observers, their projections about the pace of the economic recovery had proved too optimistic. "The committee is prepared to take further actions if appropriate," to promote the recovery and provide for "sustainable improvement in labor market conditions," he added.
In corporate news, shares of Procter & Gamble (PG) fell 2.9 percent after the consumer products giant warned of weaker than previously expected Q4 results. P&G attributed the downwardly revised guidance to slower than expected market growth rates, market share softness in developed regions and negative impacts from foreign exchange rate changes.
The major averages bounced back and forth across the unchanged line before eventually ending the session mixed. While the NASDAQ crept up 0.69 points or less than a tenth of a percent to finish at 2,930.45, while the Dow edged down 12.94 points or 0.1 percent to end at 12,824.39 and the S&P 500 slipped 2.29 points or 0.2 percent to 1,355.69.
by RTT Staff Writer
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