The Hong Kong stock market on Wednesday halted the two-day winning streak in which it had surged more than 700 points or 3.7 percent en route to a seven-week closing high. The Hang Seng Index finished just above the 19,700-point plateau, and now traders are expecting to see the market extend its losses when it kicks off trade on Thursday.
The global forecast for the Asian markets is flat with a hint of caution ahead of key central bank meetings in Europe, as well as U.S. employment data on Friday. The European Central Bank and the Bank of England will meet later today; the ECB is expected to cut interest rates, while the BOE may announce further stimulus measures. The European markets were mixed but little changed and the U.S. bourses were closed for the July 4 holiday, and the Asian markets are expected to follow the European lead.
The Hang Seng finished slightly lower on Wednesday, nudged into the red by weakness from heavyweight HSBC - although properties and telecoms provided support.
For the day, the index shed 25.78 points or 0.13 percent to finish at 19,709.75 after trading between 19,677.45 and 19,835.13 on volume of 45.78 billion Hong Kong dollars.
Among the actives, HSBC shed 1.3 percent, while Hutchison Whampoa jumped 3.9 percent, China Unicom spiked 3.3 percent, China Shenhua climbed 2.8 percent, Sino Land collected 3.3 percent and Henderson Land added 2.6 percent.
There is no lead from Wall Street, and the European markets provided little guidance as stocks snapped a three-day winning streak on Wednesday, with investors adopting a cautious stance ahead of central bank meetings tomorrow and the U.S. jobs report set to be released Friday. Trading volumes slipped due to the Independence Day holiday in the U.S.
Banks remain weak after the European Central Bank tightened the limit on the amount of government guaranteed debt that banks can use as collateral in return for loans.
On the other hand, Commodities such as copper and crude recouped some of their early losses, while the euro stayed weaker against the dollar and yen.
In economic news, the service sector in the euro area contracted less than estimated in June, a survey by Markit Economics showed. The purchasing managers' index for the service sector came in at 47.1 in June, up from 46.8 recorded in the preliminary estimates. The latest figure was also higher than May's reading of 46.7.
In a separate report, Eurozone retail sales recovered unexpectedly in May on robust non-food sales, official data showed Wednesday. Retail sales rose 0.6 percent month-on-month, partially offsetting the 1.4 percent decline in April, Eurostat said. Economists had expected no change in the retail trade volume.
The European markets finished mixed but little changed on Wednesday as Switzerland's SMI ended 0.12 percent higher, while the U.K.'s FTSE 100 eased 0.06 percent, the German DAX lost 0.20 percent and France's CAC 40 fell 0.11 percent.
In economic news, China's service sector growth eased to its weakest level in 10 months in June, a survey by Markit Economics showed Wednesday. The HSBC business activity index, measuring the performance of the service sector, fell to a 10-month low of 52.3 in June from 54.7 in May. An index reading above 50, however, indicates expansion of the sector. The composite output index, that measures activity in both manufacturing and service sectors, fell to 50.6 in June from 51.9 in May.
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