The Hong Kong stock market on Wednesday ended the three-day losing streak in which it had given away more than 410 points or 2.1 percent. The Hang Seng Index finished just below the 19,420-point plateau, and now investors are expecting a flat to lower open for the market when it opens on Thursday.
The global forecast for the Asian markets is soft, thanks to ongoing debt concerns in Europe and disappointing minutes from the Federal Reserve. Spain's Prime Minister Mariano Rajoy announced another round of austerity measures in an attempt to achieve deficit targets amid a severe recession. In addition, the minutes of the Federal Reserve's latest monetary policy meeting in June gave no hint that a third round of quantitative easing is imminent. The European markets were mixed and the U.S. bourses were slightly lower, and the Asian markets are tipped to split the difference.
The Hang Seng finished slightly higher on Wednesday as gains from the property stocks were limited by weakness from the financial sector.
For the day, the index added 23.51 points or 0.12 percent to finish at 19,419.97 after trading between 19,233.76 and 19,441.12 on volume of 43.50 billion Hong Kong dollars.
Among the actives, Sun Hung Kai Properties surged 3.6 percent, Henderson Land jumped 1.7 percent and Sino Land climbed 1.5 percent, while China Construction Bank plunged 3.0 percent and Industrial and Commercial Bank of China shed 1.9 percent.
The lead from Wall Street suggests mild consolidation as stocks showed a negative bias throughout much of Wednesday, ending modestly lower. A negative reaction to the minutes of the latest Federal Reserve meeting weighed on the markets, although stocks closed well off their worst levels of the day.
Stocks opened mostly lower amid lingering concerns about the economic outlook following last week's disappointing jobs report. Continued uncertainty about the situation in Europe also weighed on the markets. Further selling pressure followed the release of the Fed minutes.
The minutes noted that the Fed is prepared to take further action if necessary, but it gave no hint that a third round of quantitative easing is imminent. Nonetheless, selling pressure waned not long after the release of the minutes, and stocks managed to climb well off their daily lows.
Meanwhile, traders largely shrugged off the release of a report from the Commerce Department showing that the U.S. trade deficit narrowed to $48.7 billion in May from a revised $50.6 billion in April. The narrower deficit came in line with economist estimates.
A separate report from the Commerce Department showed a 0.3 percent increase in wholesale inventories in May, while wholesale sales tumbled by 0.8 percent.
While the Dow and the NASDAQ ended the session firmly in negative territory, the S&P 500 closed roughly flat. The S&P 500 edged down 0.02 points or less than a tenth of a percent to 1,341.45, while the Dow fell 48.59 points or 0.4 percent to finish at 12,604.53 and the NASDAQ slid 14.35 points or 0.5 percent to end 2,887.98.
In economic news, China on Wednesday announced a third cut in fuel prices in just two months as falling international crude prices gave room for about 5 percent reduction in prices to deal with a drop in domestic oil consumption.
The National Development and Reform Commission (NDRC) said that gasoline retail prices will be reduced by 420 yuan per ton and diesel prices by 400 yuan, starting Wednesday.
Also, sales of new passenger cars in China increased markedly in June, the China Association of Automobile Manufacturers said on Wednesday. The total number of passenger cars sold in June increased 15.77 percent year-on-year to around 1.28 million units. Sales edged up 0.24 percent on month. In the first six months of 2011, total passenger car sales increased 7.08 percent from last year to around 7.61 million units, the data showed.
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