The Hong Kong stock market has closed higher now in back-to-back sessions, surging more than 700 points or 3.3 percent en route to a seven-week closing high. The Hang Seng Index finished just above the 19,765-point plateau, and now investors are anticipating additional support when the market kicks off trade on Wednesday.
The global forecast for the Asian markets remains positive thanks to surprisingly upbeat data from the United States ahead of that country's July 4 holiday. The U.S. Commerce Department reported a larger than expected increase in factory orders in May, while U.S. automakers also had strong sales numbers in June. The upside may be limited by profit taking, as well as caution ahead of Thursday's meetings of the European Central Bank and the Bank of England, as well as Friday's U.S. employment data. The European and U.S. bourses finished higher, and the Asian markets are tipped to follow suit.
The Hang Seng finished sharply higher on Tuesday following gains from the resource stocks.
For the day, the index spiked 294.07 points or 1.51 percent to finish at the daily high of 19,765.41 after trading as low as 19,622.37 on volume of 49.81 billion Hong Kong dollars.
Among the actives, China Coal jumped 4.6 percent, China Shenhua spiked 4.1 percent and Yanzhou Coal Mining surged 5.8 percent, while Dongfeng Motor shed 4.4 percent, Guangzhou Automobile lost 4.0 percent and Galaxy Entertainment fell 1.2 percent.
The lead from Wall Street is cautiously optimistic as stocks moved mostly higher over the course of the abbreviated trading session on Tuesday after initially showing a lack of direction. With the gains, the major averages all ended the session at their best closing levels in well over a month.
The strength on Wall Street was partly due to a report from the Commerce Department showing that factory orders rose by 0.7 percent in May following two consecutive monthly decreases. Economists had expected orders to edge up 0.1 percent. With the stronger than expected growth, the report eased some of the concerns raised by Monday's report from the Institute for Supply Management showing a contraction in manufacturing activity.
The markets also benefited from news of strong sales by U.S. automakers in the month of June. Ford (F) reported a 7 percent increase in June sales, while sales by General Motors (GM) and Chrysler jumped by 16 percent and 20 percent, respectively.
Nonetheless, trading activity remained subdued, with traders looking to get a head start on the Independence Day holiday on Wednesday. Uncertainty about Friday's monthly jobs report also helped to keep traders on the sidelines along with upcoming monetary policy announcements from Europe.
Among individual stocks, shares of Microsoft (MSFT) were higher after the software giant announced that it will take a $6.2 billion charge for the impairment of goodwill in its Online Services Division segment, mostly related to its 2007 acquisition of aQuantive.
The major averages saw some volatility in the final hour of trading in the shortened session but closed firmly in positive territory. The Dow rose 72.43 points or 0.6 percent to finish at 12,943.82, while the NASDAQ advanced 24.85 points or 0.8 percent to end at 2,976.08 and the S&P 500 climbed 8.51 points or 0.6 percent to 1,374.02.
In economic news, Hong Kong's retail sales increased 5.8 percent on year in May, the Census and Statistics Department said on Tuesday, slower than the revised 7.6 percent gain in April. Economists were looking for a 6.7 percent expansion.
In the three months ended May, sales volume increased a seasonally adjusted 2.8 percent from the preceding three-month period, data showed. In the first five months of 2012, total retail sales volume increased 9.1 percent from the corresponding period a year earlier.
In value terms, retail sales increased 8.8 percent year-on-year in May, after rising a revised 11.4 percent in the previous month. The latest figure was lower than 9.7 percent economists' forecast.
Also, China will on Wednesday provide results for the HSBC Services PMI for June; it had a score of 54.7 in May.
Finally, growth of China's non-manufacturing sector improved in June, a report from China Federation of Logistics and Purchasing showed Tuesday. The purchasing managers' index for the non-manufacturing sector rose to 56.7 in June from 55.2 in May. An index reading above 50 indicates expansion of the sector.
by RTT Staff Writer
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