The Hong Kong stock market has closed lower now in two straight sessions, shedding more than 260 points or 1.4 percent along the way. The Hang Seng Index finished just above the 19,550-point plateau, and now investors are looking for further easing when the market kicks off trade on Friday.
Caution is the word of the day for the Asian markets, ahead of Federal Reserve Chairman Ben Bernanke's remarks at the Kansas City Fed's Jackson Hole symposium later in the day. Traders are hoping that Bernanke will make comments indicating whether the central bank will engage in another round of quantitative easing. Adding to the cautious sentiment, the U.S. Labor Department reported that jobless claims failed to improve last week, as was expected. The European and U.S. markets were down, and the Asian bourses are expected to follow that lead.
The Hang Seng finished sharply lower on Thursday following heavy losses among the property stocks and financial shares.
For the day, the index dropped 235.60 points or 1.19 percent to finish at 19,552.91 after trading between 19,509.31 and 19,657.20 on volume of 42.44 billion Hong Kong dollars.
Among the decliners, Sino Land plummeted 4.95 percent, while Henderson Land fell 3.41 percent, Cheung Kong dropped 2.72 percent, HSBC lost 0.81 percent, China Construction Bank dipped 2.47 percent, Industrial and Commercial Bank of China retreated 1.87 percent and Bank of Communications shed 3.48 percent.
The lead from Wall Street is soft as stocks saw notable weakness on Thursday after turning in a lackluster performance over the three previous sessions. Uncertainty ahead of Bernanke's speech contributed to the weakness on Wall Street.
A research note from Capital Economics said: "Given the unexpectedly strong signal in the minutes of the latest FOMC meeting that QE3 is coming fairly soon, we expect that Fed Chairman Ben Bernanke will reinforce the case for more action in his speech at Jackson Hole."
Further selling pressure was generated by a report that Spanish Prime Minister Mariano Rajoy said his government will delay deciding whether to seek a sovereign bailout until the aid conditions are clear.
On the economic front, the Labor Department reported that jobless claims unexpectedly came in unchanged in the week ended August 25. Initial jobless claims came in at 374,000, unchanged compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported.
A separate report from the Commerce Department showed that personal income rose by 0.3 percent in July, matching the increases in the two previous months and in line with economist estimates. The report also showed that personal spending increased by 0.4 percent in July after coming in flat in June - also as expected.
The major U.S. averages were down on Thursday as the S&P 500 fell 11.01 points or 0.8 percent to finish at 1,399.48, while the Dow slid 106.77 points or 0.8 percent to end at 13,000.71 and the NASDAQ dropped 32.48 points or 1.1 percent to close at 3,048.71.
by RTT Staff Writer
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