The Hong Kong stock market has moved lower now in consecutive trading days, dipping almost 70 points or 0.3 percent in the process. The Hang Seng Index ended just below the 23,330-point plateau, and now analysts are forecasting further weakness at the opening of trade on Tuesday.
The global forecast for the Asian markets suggests mild consolidation, with investors expected to consolidate their positions ahead of the earnings season that kicks off this week. Profit taking also may come into play after many of the regional bourses posted solid gains last week. The European and U.S. markets were down on Monday and the Asian markets are expected to open Tuesday in similar fashion.
The Hang Seng finished flat on Monday as losses from the financial shares were offset by gains from the property sector.
For the day, the index eased 1.34 points or 0.01 percent to finish at 23,329.75 after trading between 23,254.23 and 23,402.45 on volume of 81.28 billion Hong Kong dollars.
Among the actives, Tencent shed 1.4 percent, Industrial and Commercial Bank of Chine lost 0.7 percent, China Construction Bank fell 0.2 percent, China Resources Power plunged 3.5 percent and Power Assets dipped 0.6 percent, while Sun Hung Kai jumped 2.1 percent, Henderson Land climbed 2.8 percent and Cheung Kong spiked 2.2 percent.
The lead from Wall Street is negative as stocks saw moderate weakness on Monday, giving back ground after moving sharply higher last week. Selling pressure was subdued, however, and the markets held on to the bulk of their recent gains.
The weakness came as traders cashed in on the recent strength in the markets, with the major averages pulling back after posting substantial gains last week on news of the fiscal cliff deal. Those gains lifted the S&P 500 to its best closing level since December 2007, while the Dow hit a two-month closing high.
Uncertainty about the upcoming earnings season also weighed on sentiment, with aluminum giant Alcoa (AA) due to release its quarterly results after the close of trading later today. The release of Alcoa's results is seen as the unofficial start of the quarterly earnings season.
Trading activity was light amid a lack of major U.S. economic data and a quiet day for corporate news. Among individual stocks, drug giant Eli Lilly (LLY) posted a slim loss even though the company maintained its earnings outlook for fiscal year 2012 and forecast fiscal 2013 earnings higher than estimates.
In other news, the Federal Reserve announced an $8.5 billion settlement with ten mortgage servicing companies over alleged foreclosure abuses. The Fed said the sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments.
The agreement includes financial giants such as Citigroup, JP Morgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC).
The major U.S. averages were down on Monday as the Dow fell 50.92 points or 0.4 percent to finish at 13,384.29, while the NASDAQ shed 2.84 points or 0.1 percent to end at 3,098.81 and the S&P 500 dipped 4.58 points or 0.3 percent to close at 1,461.89.
by RTT Staff Writer
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