RTTNews - The Hong Kong stock market has finished higher now in two of three trading days since halting the two-day losing streak that had cost it more than 310 points or 1.5 percent. The Hang Seng Index surged above the 20,900-point plateau, although investors are preparing for the market to pull back from the 21,000-point level at the opening of trade on Tuesday.
The global forecast for the Asian markets is flat with a negative bias - particularly as investors may look to consolidate their positions after strong gains in the previous trading day. Commodities could see significant selling pressure, along with properties and airlines. The European markets were mostly lower, while the U.S. bourses ended slightly in negative territory - and the Asian markets are tipped also to move to the downside.
The Hang Seng Index finished sharply higher on Monday, supported by H-shares from mainland China - particularly the financials.
For the day, the index jumped 554.15 points or 2.72 percent to close at 20,929.52 after trading between 20,730.41 and 21,010.47 on turnover of 71.4 billion Hong Kong dollars.
Among the gainers, HSBC Holdings jumped 3.1 percent, while Bank of China added 2.75 percent, Industrial and Commercial Bank of China gained 3.13 percent, China Construction Bank was up 4 percent, China Merchants Bank climbed 1.27 percent, China CITIC Bank added 1.03 percent, Bank of Communications gained 3.98 percent, Hang Seng Bank was up 2.42 percent, Shenzhen Expressway climbed 1.49 percent and Zhejiang Expressway added 0.69 percent.
The lead from Wall Street has a touch of downside as stocks posted modest losses on Monday with traders cashing in on recent gains amid a lack of significant moves. The major averages all finished in negative territory, kicking off the week on a sour note. The decline came ahead of some key economic reports on tap for this week, including data on retail sales, industrial production and weekly jobless claims.
Further, the Federal Open Market Committee will make its interest rate announcement on Wednesday, with the key fed funds rate expected to remain unchanged amid a challenging economic environment.
On the corporate front, Freddie Mac (FRE) said late Friday that it no longer needs government aid, as the mortgage lender posted a positive net worth. Benefiting from accounting adjustments and gains, Freddie Mac reported a second quarter profit of $821 million on a notable increase in revenues to $7.47 billion from last year's $1.59 billion.
Warren Buffett-owned Berkshire Hathaway (BRKA) reported a 14 percent increase in second quarter earnings, fueled by gains from derivatives trading, which soared to $1.53 billion from $453 million in the second quarter of last year. The firm earned $1,147 per share, while Wall Street analysts expected the company to earn $1,238 per share for the quarter.
Microsoft (MSFT), which recently struck a ten-year deal with Yahoo (YHOO) to share search engine technology and ad revenue, announced an agreement with French ad company Publicis to sell its Razorfish digital advertising unit.
The major averages regained some ground going into the close of trading, although they remained stuck in the red. The Dow closed down by 32.12 points or 0.3 percent at 9,337.95, the NASDAQ slipped by 8.01 points or 0.4 percent to 1,992.24 and the S&P 500 fell by 3.38 points or 0.3 percent to 1,007.10.
In economic news, China is scheduled to release a raft of data on Tuesday, including July numbers for consumer price index, producer price index, retail sales, urban fixed asset investment, imports, exports and trade balance.
CPI is expected to ease 1.6 percent on year after the 1.7 percent contraction a month earlier. PPI is called lower by an annual 8.3 percent following the 7.8 percent decline in June. Urban FAI is expected to rise 34 percent on year after the 33.6 percent annual increase a month earlier. Imports are forecast to fall 15 percent on year after the 13.2 percent annual fall in June. Exports are called lower by 23 percent on year after the 21.4 percent decline a month earlier. The trade balance is predicted to show a surplus of $10.6 billion after the $8.25 billion surplus in June.
Also, house prices in 70 major cities in China climbed 1 percent in July from the prior year, a report from the National Development and Reform Commission showed Monday. House prices, thus rose for the second month after easing for six consecutive months. Compared to June, house prices were up 0.9 percent, which was the fifth straight monthly increase.
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