The Hong Kong stock market has finished higher now in four straight trading days, surging more than 910 points or 5 percent in that span. The Hang Seng Index settled just below the 19,800-point plateau, although now analysts are forecasting contraction at the opening of trade on Wednesday.
The global forecast for the Asian markets is negative, with investors likely to lock in gains after many of the regional bourses rallied sharply earlier in the week. In addition, traders are likely to move to the sidelines amid expectations that the ECB will unveil new measures this week to drive down the cost of financing. Investors are also awaiting an announcement by the U.S. Federal Reserve on Wednesday and the U.S. jobs report on Friday. The European and U.S. markets were down, and the Asian markets are expected to follow that lead.
The Hang Seng finished sharply higher again on Tuesday following gains from the financial shares and the property stocks.
For the day, the index spiked 211.41 points or 1.08 percent to finish at 19,796.81 after trading between 19,618.57 and 19,840.16 on volume of 51.03 billion Hong Kong dollars.
Among the gainers, Hang Lung Properties surged 3.8 percent, while China Construction Bank soared 3.4 percent, Bank of China climbed 1.7 percent, HSBC added 0.6 percent and China Mobile jumped 1.1 percent.
The lead from Wall Street suggests mild consolidation as stocks moved modestly lower on Tuesday amid subdued selling pressure. Uncertainty ahead of monetary policy decisions from both sides of the Atlantic contributed to the weakness.
Stocks turned in a lackluster performance for most of the day, as traders seemed reluctant to make any significant moves ahead of the announcements. However, modest selling pressure emerged going into the close of trading.
Traders shrugged off a batch of largely upbeat economic data as Standard & Poor's reported a bigger than expected increase in home prices, while a report from the Institute for Supply Management - Chicago showed that Chicago-area business activity unexpectedly expanded at a faster rate in July.
The Conference Board also reported an unexpected improvement in consumer confidence in July, with consumers becoming more optimistic about the short-term outlook. And a separate report from the Commerce Department showed that consumer spending unexpectedly come in roughly flat in June despite a bigger than expected increase in personal income.
On the earnings front, drug giant Pfizer reported Q2 earnings that rose year-over-year and beat estimates, while revenues also exceeded expectations. Aetna also reported better than expected second quarter earnings and raised its full-year guidance. Humana reported second quarter earnings that fell by more than expected and lowered its full-year guidance.
After showing a lack of direction for much of the session, the major averages all ended the day in the red. The Dow fell 64.33 points or 0.5 percent to finish at 13,008.68, while the NASDAQ slipped 6.32 points or 0.2 percent to end at 2,939.52 and the S&P 500 dropped 5.98 points or 0.4 percent to 1,379.32.
In economic news, China will on Wednesday see the July results of its manufacturing PMI, with forecasts suggesting a score of 50.4 - up from 50.2 in June. Also on tap is the HSBC Manufacturing PMI for July, which is called at 49.5 - up from 48.2 in June.
by RTT Staff Writer
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