The Hong Kong stock market on Tuesday finally halted the four-day slide in which it had given away more than 980 points or 5 percent. The Hang Seng Index finished just below the 19,040-point plateau, although now traders are bracing for renewed consolidation when the market kicks off trade on Wednesday.
The global forecast for the Asian markets is mixed following the technical rebound experienced by many of the regional bourses in the previous session. Fitch cut Japan's long-term foreign and local currency issuer default ratings to A+ from AA and AA-, respectively. Another potential pitfall is Greek Prime Minister Lucas Papademos, who said preparations are being made for Greek exit from euro. The European markets finished higher and the U.S. bourses were mixed but little changed, and the Asian markets are tipped to follow the latter lead.
The Hang Seng finished modestly higher on Tuesday following gains from the property stocks and financial shares.
For the day, the index collected 116.83 points or 0.62 percent to finish at 19,039.15 after trading between 19,002.64 and 19,182.66 on volume of 52.53 billion Hong Kong dollars.
Among the gainers, China Overseas Land climbed 3.9 percent, while China Resources Land spiked 4.3 percent, Evergrande surged 8.4 percent, Sino-Ocean Land soared 7.6 percent, HKEx jumped 1.5 percent and HSBC added 0.6 percent.
The lead from Wall Street offers little guidance as stocks plummeted in the latter part of the Tuesday's trade after seeing a positive bias throughout much of the session. Buying interest re-emerged in the final minutes of trading, however, and the markets ended roughly flat.
The early strength followed a report from the National Association of Realtors showing that existing home sales rose 3.4 percent to an annual rate of 4.62 million in April from a downwardly revised 4.47 million in March. Sales came in below economist estimates, but showed the second consecutive month of annual home price growth.
Bargain hunting also contributed to the upward move, although buying interest remained subdued amid news that Fitch Ratings lowered Japan's credit rating. Fitch cut Japan's long-term foreign and local currency issuer default ratings to A+ from AA and AA-, respectively, citing growing risks for Japan's sovereign credit profile as a result of rising public debt ratios.
Traders also kept a close eye on news out of Europe, and the late-day pullback was attributed to remarks by former Greek Prime Minister Lucas Papademos, who said preparations are being made for Greek exit from euro.
Among individual stocks, shares of Best Buy (BBY) rose by 1.6 percent after the consumer electronics retailer reported better than expected first quarter results. Williams-Sonoma (WSM) also gained after the home goods retailer reported first quarter results that beat estimates. On the other hand, shares of Facebook (FB) fell by 8.9 percent, extending the steep drop seen in the previous session.
While the NASDAQ remained stuck in the red, the Dow and the S&P 500 closed nearly unchanged. The NASDAQ dipped 8.13 points or 0.3 percent to finish at 2,839.08, while the Dow edged down 1.67 points or less than a tenth of a percent to 12,502.81 and the S&P 500 crept up 0.64 points or 0.1 percent to 1,316.63.
In economic news, Hong Kong's annual inflation eased to 4.7 percent in April from 4.9 percent in March, the Census and Statistics Department said on Tuesday - in line with expectations. Food prices advanced 7 percent annually, while housing costs moved up 7.2 percent. There was a 3.3 percent annual growth in clothing and footwear prices during the month, and a 3.7 percent rise the transportation costs.
On a monthly basis, on average, consumer prices moved up a seasonally adjusted 0.3 percent in April, following the 0.4 percent rise in March.
Also, a leading indicator of Chinese economic activity saw a steady increase in April, the Conference Board said Monday. The leading economic index increased 0.8 percent from a month earlier to 232.4 in April, following a 0.8 percent rise in March and 1 percent gain in February. Four of the six components contributed positively to the index in April.
The coincident economic index, which measures current economic activity, declined 0.8 percent in April to 216. This comes after a 0.6 percent increase in March and a 3.9 percent increase in February.
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