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Hong Kong Stock Market Predicted To See Continued Selling Pressure On Monday

The Hong Kong stock market has finished lower in consecutive trading days, surrendering more than 350 points or 1.4 percent along the way. The Hang Seng Index now sits just beneath the 24,550-point plateau and it may take further damage on Monday.

The global forecast for the Asian markets is soft on spiking Covid-19 cases and poor results from bank stress tests. The European markets were mixed and the U.S. bourses were sharply lower and the Asian markets figure to follow the latter lead.

The Hang Seng finished modestly lower on Friday following losses from the financial shares, property stocks, casinos and oil and insurance companies.

For the day, the index lost 231.59 points or 0.93 percent to finish at 24,549.99 after trading between 24,537.77 and 24,756.58.

Among the actives, CSPC Pharmaceutical surged 4.93 percent, while China Mobile plummeted 2.91 percent, Galaxy Entertainment plunged 2.16 percent, AIA Group tanked 1.98 percent, WH Group tumbled 1.62 percent, China Petroleum and Chemical (Sinopec) skidded 1.50 percent, CITIC retreated 1.47 percent, AAC Technologies declined 1.21 percent, Tencent Holdings surrendered 1.18 percent, CNOOC sank 1.14 percent, Sands China dropped 1.12 percent, Industrial and Commercial Bank of China shed 1.04 percent, Ping An Insurance lost 1.01 percent, Hong Kong & China Gas fell 0.83 percent, China Life Insurance slid 0.75 percent, Techtronic Industries dipped 0.40 percent, New World Development slipped 0.21 percent and China Mengniu Dairy and BOC Hong Kong were unchanged.

The lead from Wall Street is broadly negative as stocks opened sharply lower on Friday and stayed that way throughout the session.

The Dow plummeted 730.05 points or 2.84 percent to finish at 25,015.55, while the NASDAQ tumbled 259.78 points or 2.59 percent to end at 9,757.22 and the S&P 500 sank 74.71 points or 2.42 percent to close at 3,009.05.

The weakness on Wall Street was due largely to a sharp surge in new Covid-19 infections in several states, raising fears of re-imposing restrictions on businesses. The U.S. Centers of Disease Control and Prevention has warned that the number of infected people in the U.S. is most likely 10 times higher than what has been officially reported.

Financials turned lower after the Fed released the results of stress tests on banks - which said the nation's biggest banks are healthy but could suffer up to $700 billion in losses on soured loans if the economy languishes. It also ordered certain banks to cap dividends to conserve funds.

Crude oil futures settled lower on Friday, weighed down by concerns over energy demand outlook in the wake of sharp spikes in new coronavirus infections in several states in the U.S. West Texas Intermediate Crude oil futures for August ended down $0.23 or 0.6 percent at $38.49 a barrel.

Closer to home, Hong Kong will release May numbers for imports, exports and trade balance later today. In April, imports were down 6.7 percent on year and exports were down 3.7 percent on year for a trade deficit of HKD23.3 billion.

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