The Hong Kong stock market on Thursday halted the five-day winning streak in which it had surged more than 930 points or 5.1 percent. The Hang Seng Index finished just above the 19,690-point plateau, and now traders are expecting to see the losses accelerate when the market opens on Friday.
The global forecast for the Asian markets remains negative following comments by European Central Bank President Mario Draghi, who told reporters that the central bank "may undertake outright open market operations" - but traders were disappointed by the lack of details. Adding to the cautious sentiment, the U.S. Labor Department will release monthly employment data for July later in the day. The European and U.S. markets were down, and the Asian bourses figure to follow suit.
The Hang Seng finished modestly lower on Thursday following losses from the property sector.
For the day, the index dropped 130.18 points or 0.66 percent to finish at 19,690.20 after trading between 19,651.76 and 19,786.71 on volume of 43.27 billion Hong Kong dollars.
Among the actives, Bank of East Asia added 0.7 percent, while Cheung Kong shed 1.1 percent, Hutchison Whampoa dipped 1.2 percent, China Overseas Land dropped 3.3 percent and China Resources Land plummeted 4.6 percent.
Wall Street puts forth a pessimistic lead as stocks ended Thursday's session mostly lower, extending the downward move seen in the three previous sessions.
Much of the weakness stemmed from a negative reaction to comments by European Central Bank President Mario Draghi, who spoke at a press conference following the central bank's monetary policy meeting. At the meeting, the ECB decided to leave interest rates unchanged following a quarter basis point cut at its previous meeting last month.
Draghi told reporters that the central bank "may undertake outright open market operations," but traders seemed disappointed that there was not more conviction behind Draghi's remarks. Last week, Draghi promised to do whatever is necessary to support the beleaguered eurozone, leading to a rally on Wall Street.
Traders shrugged off a report from the Labor Department showing that initial jobless claims crept up to 365,000 in the week ended July 28 from the previous week's revised figure of 357,000. Economists had expected jobless claims to climb to 370,000 from the 353,000 originally reported for the previous week.
Later this morning, the U.S. Labor Department will release the keenly awaited non-farm payroll data for July. Economists expect that employment rose by about 100,000 jobs following a weaker than expected increase of 80,000 jobs in June. The unemployment rate is expected to remain unchanged at 8.2 percent.
The major averages climbed well off their worst levels going into the close but still ended the day in the red. The Dow fell 92.18 points or 0.7 percent to 12,878.88, while the NASDAQ slipped 10.44 points or 0.4 percent to end at 2,909.77 and the S&P 500 dropped 10.14 points or 0.7 percent to 1,365.00.
In economic news, China will on Friday post the July results of its non-manufacturing purchasing managers' index and the HSBC services PMI. The non-manufacturing PMI saw a score of 56.7 in June, while the Services PMI came in at 52.3.
by RTT Staff Writer
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