The Hong Kong stock market has closed higher now in two straight sessions, climbing more than 250 points or 1.2 percent along the way. The Hang Seng Index finished just above the 21,850-point plateau, and now analysts are forecasting renewed selling pressure when the market opens on Thursday.
The global forecast for the Asian markets is firmly negative following downbeat economic news from the United States. Airlines figure to lead the markets lower, along with retail stocks and financials - although gold may provide some support. The European and U.S. markets finished under pressure, and the Asian markets also are expected to track to the downside.
The Hang Seng finished flat on Wednesday as gains from the construction companies were erased by softness from the oil stocks.
For the day, the index gathered 9.38 points or 0.04 percent to finish at 21,859.97 after trading between 21,837.84 and 22,047.85 on volume totaled 64.73 billion Hong Kong dollars.
Among the actives, Li & Fung climbed 5.6 percent, while China National Building Material surged 7.0 percent, China Resources Cement added 2.3 percent, Anhui Conch Cement collected 1.6 percent and PetroChina shed 0.4 percent.
The lead from Wall Street suggests consolidation as stocks came under pressure on Wednesday after showing a lack of direction throughout much of the day. The pullback was partly due to news that the Federal Reserve lowered its forecast for U.S. economic growth.
Following a two-day meeting, the Fed announced its widely expected decision to keep its target for the federal funds rate at zero to 0.25 percent and reiterated that rates are likely to remain at exceptionally low levels for an extended period. The central bank also said it will complete its $600 billion Treasury purchase program by the end of this month, as scheduled, and said it will maintain its existing policy of reinvesting principal payments from its securities holdings.
However, the Fed indicated that the economic recovery is continuing at a somewhat slower than expected pace and downwardly revised its growth outlook for 2011 to between 2.7 and 2.9 percent from its previous outlook for 3.1 to 3.3 percent growth. The Fed also downwardly revised its outlook for U.S. economic growth in 2012 and forecast that the unemployment rates in both 2011 and 2012 would be above its April estimates.
Fed Chairman Ben Bernanke blamed the slower pace of the recovery on "temporary" factors such as rising consumer prices and supply chain problems resulting from the natural disaster in Japanese. At the same time, the Fed chief acknowledged that some of the economic headwinds could persist into next year.
Among individual stocks, Adobe Systems (ADBE) fell by 6.3 percent after the diversified software company reported better than expected second quarter results but provided disappointing guidance.
Meanwhile, shares of FedEx (FDX) rose by 2.6 percent after the delivery giant reported better than expected fourth quarter results and said it is well positioned to deliver strong earnings growth in fiscal 2012.
The major averages ended the session just off their worst levels of the day. The Dow fell 80.34 points or 0.7 percent to 12,109.67, the NASDAQ dropped 18.07 points or 0.7 percent to 2,669.19 and the S&P 500 slid 8.38 points or 0.7 percent to 1,287.14.
In economic news, Hong Kong will on Thursday release Q1 numbers for its current account. Hong Kong posted a surplus of $25.98 billion in the fourth quarter of 2010.
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