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Hang Seng May Take Additional Damage

12/13/2012 8:17 PM ET

The Hong Kong stock market on Thursday halted the three-day winning streak in which it had risen more than 310 points or 1.4 percent en route to another fresh 16-month closing high. The Hang Seng Index finished just above the 22,445-point plateau, and now traders are expecting to see the market extend its losses when it opens on Friday.

The global forecast for the Asian markets is soft, with lingering concerns about the looming fiscal cliff overshadowing a batch of largely upbeat economic data. Lawmakers in Washington continue to struggle to reach an agreement to avoid the fiscal cliff - which could overshadow a report showing that U.S. weekly jobless claims pulled back near a four-year low. The European and U.S. markets were down, and the Asian bourses figure to follow that lead.

The Hang Seng finished modestly lower on Thursday following losses from the property sector and a mixed performance from the financial shares.

For the day, the index fell 57.77 points or 0.26 percent to finish at 22,445.58 after trading between 22,380.78 and 22,563.14 on volume of 62.49 billion Hong Kong dollars.

Among the actives, China Resources plummeted 4.21 percent, while Cheung Kong plunged 1.56 percent, Henderson Land lost 1.17 percent, New World Development shed 0.98 percent, Sino Land dipped 0.71 percent, Bank of Communications fell 0.69 percent, Cathay Pacific jumped 1.33 percent, Ping An Insurance gained 0.50 percent and HSBC collected 0.38 percent.

The lead from Wall Street is negative as stocks fell under pressure on Thursday, with lingering concerns about the looming fiscal cliff overshadowing a batch of largely upbeat economic data. Traders may also have been cashing in following recent gains.

Lawmakers in Washington continue to struggle to reach an agreement to avoid the fiscal cliff. House Speaker John Boehner, R-Ohio, once again accused President Barack Obama of failing to provide a serious offer, claiming that the White House is not offering enough in spending cuts.

Boehner has made similar remarks for several days, while Democrats continue to attack the GOP for being unwilling to accept higher tax rates on wealthy Americans.

The worries overshadowed a report from the Labor Department showing that weekly jobless claims pulled back near a four-year low. Jobless claims fell to 343,000 in the week ended December 8, down 29,000 from the previous week's revised figure of 372,000. Economists had expected claims to be unchanged compared to the 370,000 originally reported for the previous week.

Also, the Commerce Department said that retail sales increased 0.3 percent in November following a 0.3 percent decrease in October. Economists had expected an increase of 0.6 percent. Excluding a 4.0 percent drop in sales by gas stations, retail sales rose by 0.8 percent in November compared to a 0.5 percent drop in October.

Traders also continued to digest the Federal Reserve's plan to replace "Operation Twist," which expires at the end of the year, with the purchase of longer-term Treasury securities at a pace of $45 billion per month.

The major U.S. averages were down on Thursday as the Dow fell 74.73 points or 0.6 percent to finish at 13,170.72, while the NASDAQ slid 21.65 points or 0.7 percent to close at 2,992.16 and the S&P 500 dropped 9.03 points or 0.6 percent to end at 1,419.45.

In economic news, China will on Friday see the December results for the HSBC flash manufacturing PMI; in November, the index was at 50.5.

by RTT Staff Writer

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