RTTNews - The Hong Kong stock market headed back to the upside on Thursday, one day after ending the two-day winning streak in which it had gathered more than 700 points or 3 percent on its way to a fresh 12-month closing high. The Hang Seng Index bounced back above the 20,850-point support plateau, and now investors are anticipating another solid move to the upside at the opening of trade on Friday - perhaps reclaiming the 21,000-point level again.
The global forecast for the Asian markets is fairly optimistic as unremarkable economic data out of the U.S. was more than offset by positive GDP readings from France and Germany, marking the end of the recession in both countries. Commodities and financials are forecast to lead the gains, while steel stocks also are tipped to rise. European and U.S. markets finished modestly higher, and the Asian bourses also are expected to move to the upside.
The Hang Seng finished sharply higher on Thursday, thanks to solid gains among the property stocks and the financials.
For the day, the index surged 426.06 points or 2.1 percent to close at 20,861.30 after trading between 20,746.92 and 20,943.86 on turnover of 69.03 billion Hong Kong dollars.
Among the gainers, Cheung Kong was up 2 percent, while Hutchison Whampoa gained 2.3 percent, Hong Kong Exchanges and Clearing added 2.9 percent and HSBC jumped 3 percent.
The lead from Wall Street is modestly positive as stocks were able to post modest gains on Thursday, even as a slew of largely disappointing economic reports contributing to some uncertainty in the markets. The major averages saw choppy trading over the course of the day, but late buying interest helped stocks to finish on the upside for the second straight session.
Traders were presented with a number of economic reports on the day, with first-time claims for unemployment benefits showing a modest increase in the week ended August 8th, according to the Labor Department. The headline figure surprised economists, who had expected a modest decrease. Nonetheless, jobless claims remain well off the peaks seen during the spring months. The jobs report showed that initial jobless claims edged up to 558,000 from the previous week's revised figured of 554,000. Economists had been expecting claims to slip to 545,000 from the 550,000 originally reported for the previous week.
In a separate report, the Commerce Department said retail sales fell 0.1 percent in July. This followed a revised 0.8 percent increase in the previous month. The figure surprised economists, who had expected sales to increase by 0.8 percent. Additional data from the Commerce Department revealed that business inventories fell by more than expected in the month of June, although the report also showed a notable increase in business sales during the month.
Stocks saw some upside following the results of the Treasury Department's $15 billion sale of thirty-year bonds. The sale drew a high yield of 4.541 percent and attracted strong demand, with the bid-to-cover ratio coming in at 2.54. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The auction completed the Treasury's $75 billion in security offerings this week, designed to refund approximately $60.9 billion of privately held securities maturing on August 15, 2009 and to raise approximately $14.1 billion for government expenditures.
The major averages saw a steady upward move in late-session dealing, closing near their best levels of the day. The Dow finished up by 36.58 points or 0.4 percent at 9,398.19, the NASDAQ climbed by 10.63 points or 0.5 percent to 2,009.35 and the S&P 500 rose by 6.92 points or 0.7 percent to 1,012.73.
In economic news, Hong Kong will on Friday release gross domestic product figures for the second quarter of 2009. Forecasts call for a 5.3 percent contraction on year after the 7.8 percent annual decline in the previous three months.
On the corporate front, China XD Plastics Company announced that its second-quarter net income was $5.0 million, down 2.0 percent from $5.1 million in the same period last year. Net income for the quarter was $0.13 per share, compared to $12.56 per share in the year ago quarter. Adjusting for non-cash charge, non-GAAP net income for the second quarter of 2009 was $5.4 million, or $0.14 earnings per share.
Operating income for the second quarter 2009 was $5.3 million, unchanged from the $5.3 million in the same period a year ago. Revenues for the second quarter 2009 were $31.9 million, up 38.2 percent from $23.1 million in the same period of 2008.
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