The Hong Kong stock market has climbed higher now in three straight trading days, collecting more than 360 points or 1.9 percent in the process. The Hang Seng Index finished just above the 19,455-point plateau, and now traders are anticipating continued support when the market opens on Wednesday.
The global forecast for the Asian markets is positive, although the upside may be limited by solid gains in the previous session. Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that the central bank is prepared to take further action if the economy continues to struggle, although he did not say that further stimulus was imminent. On the corporate front, Goldman Sachs, Coca-Cola and Mattel all reported better than expected second quarter results. The European markets were mixed and the U.S. bourses ended higher, and the Asian markets figure to split the difference.
The Hang Seng finished sharply higher on Tuesday following gains from the financial stocks and the airlines.
For the day, the index spiked 333.99 points or 1.75 percent to finish at 19,455.33 after trading between 19,156.96 and 19,479.28 on volume of 42.68 billion Hong Kong dollars.
Among the gainers, Industrial and Commercial Bank of China climbed 2.5 percent, while Bank of Communications jumped 1.9 percent and Cathay Pacific surged 2.8 percent.
The lead from Wall Street is upbeat as stocks moved mostly higher on Tuesday afternoon, following considerable volatility in the morning. The markets benefited from a positive reaction to the latest batch of earnings news as well as the release of largely upbeat U.S. economic data.
Goldman Sachs reported Q2 earnings of $1.78 per share on revenues of $6.6 billion compared to estimates for earnings of $1.12 per share on revenues of $6.4 billion. Shares of Goldman Sachs edged up by 0.3 percent on the news. Coca-Cola and Mattel also reported better than expected second quarter results and rose by 1.6 percent and 9.7 percent, respectively.
On the economic front, the Federal Reserve reported that industrial production rose 0.4 percent in June following a revised 0.2 percent decrease in May. Economists had expected an increase of 0.3 percent compared to the 0.1 percent drop originally reported for May.
A separate report from the National Association of Home Builders showed a big improvement in homebuilder confidence in July, with the NAHB /Wells Fargo Housing Market Index jumping to a new five-year high.
The Labor Department also reported that U.S. consumer prices came in unchanged in June, as a steep drop in energy prices was offset by higher prices for food, medical care, and apparel.
Traders also kept a close eye on Bernanke's testimony, in which he reiterated that the central bank is prepared to take further action if the economy continues to struggle, but his remarks did not seem to indicate that further stimulus was imminent.
The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Dow climbed 78.33 points or 0.6 percent to finish at 12,805.54, while the NASDAQ rose 13.10 points or 0.5 percent to end at 2,910.04 and the S&P 500 advanced 10.03 points or 0.7 percent to
In economic news, the volume of Hong Kong's domestic exports, excluding re-exports, decreased 16.2 percent year-on-year in May, the Census and Statistics Department said on Tuesday. Re-exports increased 1.7 percent annually during the month. Taken together, the volume of total exports increased 1.3 percent year-on-year. The volume of imports increased 0.7 percent.
Also, foreign direct investment flows to China dropped 6.9 percent from a year earlier to $12 billion in June, the Ministry of Commerce said on Tuesday. During the first six months of the year, FDI inflows fell 3 percent to $59.1 billion.
The country's outbound direct investment in the non-financial sector, meanwhile, rose 48.2 percent annually in the first half of the year, according to the ministry.
by RTT Staff Writer
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