The Hong Kong stock market has closed lower now in three straight sessions, retreating almost 230 points or 1.2 percent along the way. The Hang Seng Index finished just below the 19,990-point plateau, although now traders are expecting to find traction when the market kicks off trade on Thursday.
The global forecast for the Asian markets is positive following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which suggested that further stimulus measures are warranted. The European markets were down and the U.S. bourses were mixed, and the Asian markets are tipped to open higher - also largely on profit taking following recent selling.
The Hang Seng finished sharply lower on Wednesday following weakness from the resource stocks.
For the day, the index plummeted 212.31 points or 1.06 percent to finish at 19,887.78 after trading between 19,853.42 and 19,996.73 on volume of 39.46 billion Hong Kong dollars.
Among the actives, China Coal Energy shed 2.8 percent, while Belle dropped 4.6 percent and China Telecom spiked 4.5 percent.
The lead from Wall Street is cautiously optimistic as stocks moved higher in the afternoon on Wednesday before ending the day mixed after moving mostly lower in morning trade. The release of the minutes of the latest Federal Reserve meeting contributed to some late-day volatility.
The early weakness followed some troubling economic news from overseas, with a report from Japan showing that the country swung to a trade deficit in July. The Japanese Finance Ministry reported a trade deficit of 517.4 billion yen in July compared to a trade surplus of 60.3 billion yen in June. Japanese exports fell 8.1 percent year-over-year, while imports rose 2.1 percent.
A negative reaction to quarterly results from Dell also weighed on the markets, with the PC giant falling by 5.4 percent. After the close of trading on Tuesday, Dell reported second quarter adjusted earnings that exceeded estimates but on weaker than expected sales. The company also lowered its full year earnings outlook and forecast a 2 to 5 percent sequential drop in third quarter revenues.
Selling pressure was relatively subdued, however, with an upbeat report on existing home sales helping to limit the downside for the markets. The National Association of Realtors said existing home sales rose 2.3 percent to an annual rate of 4.47 million in July from 4.37 million in June.
Stocks subsequently regained some ground following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which suggested that the central bank is losing patience with the pace of the fragile U.S. economic recovery.
Many members of the Federal Reserve said additional monetary policy accommodation is likely warranted unless the economy improves substantially, potentially opening the door for another round of quantitative easing measures at the next meeting in September.
The major U.S. averages were mixed on Wednesday as the Dow fell 30.82 points or 0.2 percent to finish at 13,172.76, while the NASDAQ rose 6.41 points or 0.2 percent to end at 3,073.67 and the S&P 500 edged up 0.32 points or less than 0.1 percent to close at 1,413.49.
In economic news, China will on Thursday see the August results of the HSBC flash manufacturing PMI. The index came in at 49.3 in July, just under the cutoff at 50 that signals contraction. China also will see the July results of the leading and coincident indexes from the Conference Board; in June, they were up 0.1 percent and 0.5 percent, respectively.
by RTT Staff Writer
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