The Hong Kong stock market has moved lower now in three straight sessions, shedding more than 620 points or 3.1 percent in the process. The Hang Seng Index closed just shy of the 18,900-point plateau, and now traders are expecting further losses when the market kicks off trade on Tuesday.
The global forecast for the Asian markets remains negative on lingering concerns about the ongoing European debt crisis. Spain has now formally asked for a bailout to shore up its ailing banking sector, and it was quickly followed by a similar request from Cyprus. In addition, Moody's downgraded 28 Spanish banks - although better than expected economic data from the U.S. may provide support. The European and U.S. markets finished sharply mower, and the Asian bourses are also expected to open in the red.
The Hang Seng finished modestly lower on Monday as losses from the resource stocks were mitigated by support from the properties.
For the day, the index fell 97.68 points or 0.51 percent to finish at 18,897.45 after trading between 18,861.56 and 19,066.75 on volume of 37.47 billion Hong Kong dollars.
Among the actives, China Coal shed 2.8 percent, Chalco dropped 2.4 percent and Sinopec lost 2.3 percent, while Evergrande jumped 2.6 percent, China Overseas Land added 0.2 percent and Hang Lung Properties climbed 2.2 percent.
The lead from Wall Street suggests continued consolidation as stocks moved sharply lower during trading on Monday after seeing considerable volatility last week. Lingering concerns about the ongoing European debt crisis weighed on the markets amid worries about the impact on the global economy.
The sell-off came as traders kept a close eye on the latest developments in Europe, where Spain formally asked for a bailout to shore up its ailing banking sector. Europe is likely to remain in focus throughout the week, as European leaders are due to hold a summit to discuss the ongoing debt crisis on Thursday and Friday.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a bigger than expected increase in U.S. new home sales.
The report showed sales of new single-family homes at a seasonally adjusted annual rate of 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists had expected new home sales to climb to 350,000. With the much bigger than expected increase, new home sales in May came in at their highest level since April of 2010.
After moving sharply lower in early trading, the major averages remained stuck firmly in the red throughout the session. The Dow fell 138.12 points or 1.1 percent to finish at 12,502.66, while the NASDAQ tumbled 56.26 points or 2 percent to end at 2,836.16 and the S&P 500 slid 21.30 points or 1.6 percent to 1,313.72.
On the economic front, Hong Kong will on Tuesday provide May figures for imports, exports and trade balance. Forecasts suggest a deficit of 38.8 billion Hong Kong dollars after showing a shortfall of 42.87 billion HKD in April. Imports were at 309.13 billion HKD in April, while exports came in at 266.25 billion HKD.
by RTT Staff Writer
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