The Hong Kong stock market has alternated between positive and negative finishes through the last five trading days, since the end of the two-day losing streak in which it had declined nearly 400 points or 1.7 percent. The Hang Seng Index finished just below the 23,630-point plateau, and now analysts are forecasting little movement at the opening of trade on Tuesday.
The global forecast for the Asian markets is mildly positive on solid earnings and economic news. Technology stocks are expected to provide support, along with airlines and gold miners - although the financials may come under pressure. The European and U.S. markets finished higher on Monday, and the Asian bourses are predicted to follow suit.
The Hang Seng finished modestly higher on Monday, thanks to gains from the industrials, utilities and financials - while property stocks weighed on investors.
For the day, the index jumped 110.37 points or 0.47 percent to finish at 23,627.91 after trading between 23,519.16 and 23,781.88 on turnover of 85.7 billion Hong Kong dollars.
Among the gainers, HK Exchange jumped 4.9 percent, while Henderson Land added 0.44 percent, Cheung Kong gained 0.44 percent, Bank of China climbed 0.67 percent, Sinopec collected 2.91 percent, PetroChina gathered 1.74 percent and CNOOC rose 1.25 percent.
Finishing lower, Hang Seng Bank eased 0.43 percent, while China Mobile lost 0.25 percent, Sun Hung Kai Properties fell 0.67 percent and Industrial and Commercial Bank of China was down 0.48 percent.
The lead from Wall Street is cautiously optimistic as stocks saw modest gains to open the week on Monday, with the dollar weakening in the wake of comments from the G20 indicating little willingness of other nations to participate in devaluing their currencies.
Buying interest in the session came as the world's finance ministers announced an avoidance of competitive currency devaluation over the weekend, leading to substantial dollar weakness. The greenback hit a fresh 15-year low against the yen while also sliding against the euro and the British pound.
Amid a relatively light day on the U.S. economic calendar, the National Association of Realtors said existing home sales jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August.
Economists had expected sales to rise to an annual rate of 4.25 million from the 4.13 million originally reported for the previous month. While existing home sales rose for the second consecutive month, the annual rate remains 19.1 percent below the 5.60 million-unit pace seen in September of 2009.
In other news regarding the housing sector, Federal Reserve Chairman Ben Bernanke revealed that reviews of foreclosure practices by major banks will be unveiled in November. The report is expected to gauge the effect of errors on the real estate market and major financial institutions. The housing market remains weak and high levels of mortgage distress may well persist for some time to come, Bernanke also said.
On the earnings front, Texas Instruments Inc. said Monday after the markets closed that its third quarter profit rose 60 percent from last year, helped by higher revenue and improved margins amid growth in all of its business segments. The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue. The world's second largest maker of mobile phone chips reported net income for the third quarter of $859 million or $0.71 per share, compared to $538 million or $0.42 per share for the year-ago quarter.
The major averages all saw some downside in late-session dealing but still managed to close at their best levels in nearly six months. The Dow gained 31.49 points or 0.3 percent to close at 11,164.05, the NASDAQ advanced by 11.46 points or 0.5 percent to 2,490.85 and the S&P 500 rose by 2.54 points or 0.2 percent to end at 1,185.62.
In economic news, Hong Kong will on Tuesday release September numbers for imports, exports and trade balance. Imports are tipped to rise 22.2 percent on year following the 28.4 percent annual expansion in August. Exports are called higher by 30 percent on year after collecting 36 percent in the previous month. The trade balance is expected to show a deficit of 17.8 billion Hong Kong dollars following the 11.9 billion HKD shortfall in August.
Also, inflation is putting pressure on the People's Bank of China to raise interest rates further, a Chinese policy maker said on Monday. PBoC adviser Xia Bin said the central bank will raise the interest rate depending on the movements in the consumer price index, the Beijing News reported.
Last week, the central bank increased its key interest rates unexpectedly by 25 basis points in a bid to cool accelerating inflation and an overheating economy. The one-year benchmark deposit rate was increased to 2.50 percent from 2.25 percent and the one-year lending rate to 5.56 percent from 5.31 percent.
In corporate news, China Integrated Energy on Monday said it acquired a retail gas station located in Shaanxi Province, China from Wenhua Lu, who owned 100 percent of equity interests in the Shenmu gas station for around $9.2 million. For the fiscal year of 2011, the Xian, China-based company expects the Shenmu gas station to sell around 12,000 tons of fuel and generate around $12.3 million in revenue.
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