RTTNews - The Hong Kong stock market has finished lower now in three straight sessions, shedding more than 800 points or 4.5 percent along the way. The Hang Seng Index fell through support at 18,100, and now analysts are predicting that the market could test the 18,000-point plateau again on Thursday after drawing solid intraday support from that level over the past few days.
The global forecast for the Asian markets is flat with a touch of downside. Financials are expected to be in focus following the Obama administration's proposed financial system reforms. Technology shares may provide a bit of support, as might the commodities after some heavy selling in recent sessions. The European markets finished sharply lower and the American bourses ended virtually flat, and the Asian markets are projected to fall right in between with modest declines.
The Hang Seng finished modestly lower on Wednesday, as losses among the oil stocks were canceled out by gains among the financials and a mixed performance from the properties. For the day, the index lost 80.9 points or 0.45 percent to close at 18,084.60 after trading between 17,833.77 and 18,255.13 on turnover of 74.48 billion Hong Kong dollars.
Among the decliners, China Resources Gas Group dropped 8.53 percent, while Sun Hung Kai Properties lost 1.1 percent, Cheung Kong (Holdings) dropped 1.77 percent, Hutchison Whampoa fell 0.87 percent, Henderson Land Development was down 2.98 percent, CNOOC fell 2.02 percent, China Oilfield Service lost 1.71 percent, PetroChina shed 1.26 percent and Sinopec retreated 1.76 percent.
Finishing higher, HSBC Holdings added 0.23 percent, while SOHO China rose 2.49 percent, Bank of China added 0.8 percent, Industrial and Commercial Bank of China gained 2.11 percent, China Construction Bank was up 1.34 percent, China Merchants Bank rose 0.48 percent, China CITIC Bank was up 0.21 percent and Bank of Communications added 0.4 percent.
Wall Street offers little in the way of guidance with perhaps a slight negative bias as the major averages finishing on opposite sides of the unchanged line on Wednesday following two days of steep losses. The lack of conviction came amid low volume and mixed trader sentiment regarding near-term economic prospects and proposed financial system reforms from the Obama administration.
Seeking to prevent a recurrence of the financial meltdown that sunk the U.S. economy into a recession, President Barack Obama laid out a sweeping agenda for regulatory reform earlier this afternoon. The president proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets.
In addition, Obama called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart. Obama also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
Earlier, traders digested a report on consumer prices from the Labor Department that showed a modest increase in the month of May, with the mild price growth coming in below the expectations of economists. The report showed that prices edged up 0.1 percent in May after coming in unchanged in April. Economists had been expecting a somewhat more substantial increase in prices of about 0.3 percent.
Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
In other news, the Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019. The day's buyback saw a total of $26.2 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $169.97 billion since the program began on March 25th.
The major averages ended the session mixed, largely unable to hold onto their earlier gains. While the NASDAQ finished higher by 11.88 points or 0.7 percent at 1,808.06, the Dow slid 7.49 points or 0.1 percent to 8,497.18 and the S&P 500 dropped by 1.26 points or 0.1 percent to 910.71.
In corporate news, China Southern Airlines has selected Pratt & Whitney's PW4170 Advantage70 engine to power 10 Airbus A330 aircraft. The contract is valued at $590 million, including a 10-year Fleet Management Plan for engine maintenance.
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