The Hong Kong stock market has closed lower now in five straight sessions, plummeting more than 980 points or 4.8 percent en route to a fresh three-week closing low. The Hang Seng Index finished just above the 20,330-point plateau, and now analysts are predicting another soft start for the market when it opens on Thursday.
The global forecast for the Asian markets remains negative as reports suggest that the debt problems in Europe are growing worse. Greece is facing a political impasse after voters turned down the parties that accepted the international bailout terms. Also, Spanish banks were pummeled after borrowing costs spiked higher for Madrid. The European markets finished mostly lower and the U.S. bourses were firmly in the red - and the Asian markets also figure to track to the downside.
The Hang Seng finished modestly lower on Wednesday following losses from the resource stocks and exporters.
For the day, the index declined 154.11 points or 0.75 percent to finish at 20,330.64 after trading between 20,257.61 and 20,371.66 on volume of 55.12 billion Hong Kong dollars.
Among the actives, Aluminum Corporation of China (Chalco) plunged 5.1 percent, while Li & Fung shed 3.5 percent, Esprit lost 2.8 percent, China Merchants Holdings fell 2.5 percent and HSBC added 0.7 percent.
The lead from Wall Street suggests consolidation as stocks moved lower on Wednesday, although they moved off of session lows later in the day. The early sell-off came as traders continued to express concerns about the recent elections in France and Greece and their potential impact on efforts to address the European debt crisis.
Investors kept a close eye on the political situation in Greece, where leftist leader Alexis Tsipras attempted to form a coalition government. Tsipras is opposed to the terms of the bailout by the European Union and the International Monetary Fund - although his efforts have been unsuccessful, however, with the debt-plagued nation potentially headed to a new round of elections in June.
Further selling pressure was generated by reports that Eurozone countries were debating a potential delay in a 5.2 billion euro bailout payment to Greece due to the ongoing political uncertainty. But subsequent reports contradicted the news from the Journal and helped the markets to recover, and the European Financial Stability Facility's Board of Directors later confirmed the payment.
In corporate news, shares of Disney (DIS) rose by 1.6 percent after the entertainment giant reported better than expected second quarter results, benefiting from strong performances by its media networks and theme parks.
The major averages ended the day firmly in negative territory, although well off their worst levels of the day. The Dow dropped 97.03 points or 0.8 percent to finish at 12,835.06, while the NASDAQ fell 11.56 points or 0.4 percent to end at 2,934.71, and the S&P 500 slid 9.14 points or 0.7 percent to 1,354.58.
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