The Hong Kong stock market has finished higher now in two of three trading days since the end of the six-day losing streak in which it had declined nearly 500 points or 2.5 percent. The Hang Seng Index finished just above the 20,620-point plateau, and now investors are anticipating continued strength when the market kicks off trade on Thursday.
The global forecast for the Asian markets is broadly positive, keyed by positive economic data out of the United States and China. Oil stocks are expected to provide support, as are the steel and financial sectors. The European and U.S. markets finished sharply higher, and now the Asian bourses are expected to follow suit.
The Hang Seng finished modestly higher on Wednesday, thanks to gains from the construction companies and the mining stocks. Financials also were higher, while property stocks pared the overall upside.
For the day, the index collected 87.43 points or 0.43 percent to finish at 20,623.83 after trading between 20,529.87 and 20,649.45 on turnover of 56.52 billion Hong Kong dollars.
Among the gainers, Luks Group surged 6.20 percent, while Anhui Conch added 4.34 percent, China State Construction gained 2.97 percent, Zijin Mining climbed 4.09 percent, Hunan Nonferrous Metals collected 3.93 percent, HSBC Holdings added 0.9 percent and Industrial & Commercial Bank of China gained 0.2 percent.
Finishing lower, Sun Hung Kai Properties eased 0.2 percent and Cheung Kong Holdings shed 0.6 percent.
Wall Street puts forth a very optimistic lead as stocks saw substantial gains to open the traditionally slow month of September on Wednesday, with data showing a pickup in manufacturing activity in both the U.S. and China recharging some hopes of a continued economic recovery. The rally was further fueled by a better than expected reading on resource-linked Australian GDP.
On the economic front, the Institute for Supply Management reported that its index of U.S. manufacturing activity rose to 56.3 in August from 55.5 in July, surprising economists who had expected the index to dip to 52.9.
Market sentiment was already upbeat ahead of the report, as data from Markit Economics showed that Chinese manufacturing activity expanded after a two-month contraction. The headline index came in at 51.9, up from 49.4 in July.
Early optimism was also generated by a report from the Australian Bureau of Statistics showing that Australian GDP rose by 1.2 percent in the second quarter compared to the 0.7 percent growth seen in the previous quarter. Economists had expected the economy to grow by 0.9 percent.
Meanwhile, the day's second-tier economic data from the U.S. saw little reaction. The Commerce Department said that construction spending fell by 1.0 percent in July, which was steeper than expected.
Also, Automatic Data Processing, Inc. (ADP) reported that private sector employment fell by 10,000 jobs in August, while economists had forecast an increase of 13,000 jobs.
On the corporate front, General Motors Co. and Ford Motor Co. (F) both reported drops in their U.S. vehicle sales for August compared to the same month last year, when sales were boosted by the U.S. government's "Cash for Clunkers" incentive program. GM reported a 25 percent drop in U.S. vehicle sales for August, while Ford reported an 11 percent decline.
The major averages saw further upside in late-session dealing, ending near their best levels of the day. The Dow shot up by 254.75 points or 2.5 percent to 10,269.47, the NASDAQ surged by 62.81 points or 3 percent to 2,176.84 and the S&P 500 advanced by 30.96 points or 3 percent to 1,080.29.
In economic news, Markit Economics said the HSBC manufacturing purchasing managers' index was at a seasonally adjusted 51.9, up from 49.4 in July. A reading above 50 indicates expansion, while one below suggests contraction.
Chinese manufacturing output rose in August, albeit only slightly, ending a two-month period of contraction. This was mainly due to a rise in the inflow of new orders, which rose for the first time in three months.
A separate measure of the manufacturing PMI released earlier by the Federation of Logistics and Purchasing showed a score of 51.7 in August, up from 51.2 in the previous month. This was the 18th successive month in which the index was above the no-change level of 50.
The CFLP's PMI is semi-official and is used by the government in policymaking. According to the indicator, sub-indices such as new export orders, new orders and input prices rose, while imports and employment fell.
In corporate news, China Green Agriculture on Wednesday reported fourth-quarter net income of $6.0 million or $0.25 per share, compared with $4.4 million or $0.24 per share in the same quarter last year. Analysts expected the company to earn $0.24 per share for the quarter.
Net sales for the quarter increased 54.5 percent to $16.2 million from $10.5 million in the comparable quarter last year. Analysts expected the company to report revenue of $15.08 million for the quarter.
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