The Hong Kong stock market on Monday snapped the three-day winning streak in which it had collected more than 550 points or 2.4 percent along the way. The Hang Seng Index now rests just above the 21,480-point plateau, and now analysts are predicting a mild recovery at the opening of trade on Tuesday.
The global forecast for the Asian markets is again virtually flat with a touch of upside in what is expected to be very thin trade in between the Christmas and New Year's holidays. Oil and gold stocks may provide a bit of support, although properties and airlines are expected to be weak. The European and U.S. markets finished slightly higher, and now the Asian markets are expected to follow suit.
The Hang Seng finished slightly lower on Monday, thanks to considerable profit taking in the property sector.
For the day, the index eased 36.78 points or 0.2 percent to finish at 21,480.22 after trading between 21,474.11 and 21,739.39 on turnover of 37.89 billion Hong Kong dollars.
Among the actives, Sun Hung Kai Properties shed 1.3 percent, while Henderson Land declined 2.0 percent, Cheung Kong lost 1.0 percent, Sino Land added 0.5 percent and China Mobile gained 0.3 percent.
The lead from Wall Street is cautiously optimistic as stocks were able to eke out modest gains to kick off the last trading week of the year, with a lack of economic catalysts limiting movement in Monday's dealing. The major averages were able to move higher for a sixth straight session, setting fresh yearly closing highs.
Airline stocks came under considerable pressure today, however, as the weekend's attempted terrorist attack by a supposed al-Qaeda operative on a transatlantic flight bound for Detroit from Amsterdam sparked global security concerns. Even though the attack was thwarted and resulted in no casualties or impact to airline operations, airlines worldwide have stepped up security measures in the wake of the attack.
In other news, holiday shopping showed a modest increase this year, according to the MasterCard Advisors' SpendingPulse report, which tracks national retail and service sales. The report showed year-over-year growth in the period between Black Friday and December 24th in all sectors measured. Retail stocks saw modest strength following the report.
Also, the Treasury Department sold $44.0 billion in two-year notes, seeing weaker than usual demand, with the bid-to-cover ratio for the auction coming at 2.91. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major averages moved to the upside going into the close, ending the day modestly higher. The Dow gained 26.98 points or 0.3 percent to close at 10,547.08, the NASDAQ advanced by 5.39 points or 0.2 percent to 2,291.78 and the S&P 500 rose by 1.30 points or 0.1 percent to 1,127.78.
In economic news, Hong Kong is scheduled to release retail sales data for November on Tuesday. Sales by value are tipped to rise 8 percent on year after the 9.8 percent annual expansion in October. By volume, retail sales are predicted to gain 6.4 percent on year after the 8.2 percent annual increase in the previous month.
Also, Hong Kong's Census and Statistics Department announced that the exports value increased 1.3 percent year-on-year to HK$234.1 billion in November, after falling 13.1 percent in October. Economists expected an increase of 1.6 percent.
Meanwhile, imports value climbed 6.5 percent on an annual basis to HK$254.8 billion in November, compared to the 10.7 percent fall in the previous month. Economists were looking for an increase of 6.1 percent.
The trade deficit stood at HK$20.7 billion in November, widening from HK$19.2 billion deficit in October. Economists had predicted a trade deficit of HK$21 billion.
Finally, Chinese industrial profits increased 7.8 percent to CNY 2.58 trillion during January to November, the National Bureau of Statistics said on Monday. Industrial profits fell 10.6 percent in the January to August period. Profit of state owned enterprises was down 4.5 percent, while privately run enterprises recorded an annual growth of 17.4 percent for the first 11 months.
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