RTTNews - The Hong Kong stock market has finished lower now in three straight sessions, giving up nearly 500 points or 3 percent in the process. The Hang Seng Index has moved lower in six of the last seven trading days and now maintains support at 17,700 points - and analysts are predicting that the market will remain in that vicinity on Thursday.
The global forecast for the Asian markets offers little guidance as investors wait for the corporate earning season to get more deeply under way after a modest start. Continued pressure on commodities also negates any bullish sentiment. The European markets finished sharply lower and the U.S. bourses ended fairly flat on either side of the unchanged line - and the Asian markets are tipped to follow the U.S. lead.
The Hang Seng finished modestly lower on Wednesday, weighed down by losses among the financials, airlines and shipping stocks.
For the day, the index fell 141.2 points or 0.79 percent to close at 17,721.07 after trading between 17,493.62 and 17,819.31 on turnover of 57.06 billion Hong Kong dollars.
Among the decliners, HSBC Holdings shed 0.94 percent, while Air China eased 0.51 percent, China Southern Airlines fell 2.42 percent, Cathay Pacific Airways was off 0.37 percent, China Shipping Development Company dropped 3.92 percent, China Shipping Container Lines lost 1.47 percent, Pacific Basin Shipping was down 3.56 percent and China COSCO Holdings Company shed 3.3 percent.
The lead from Wall Street is inconclusive as stocks swung between gains and losses over the course of the trading session on Wednesday, ending the day little changed after a modest upward move at the open. The major averages finished mixed after posting steep losses in the previous session. The lack of direction that was seen over the course of the trading day came as traders were reluctant to make any significant moves ahead of the start of the earnings season.
Shortly after the closing bell, Alcoa (AA) reported an adjusted second quarter loss of $256 million or $0.26 per share, while Wall Street expected the company to report a loss of $0.37 per share. The firm also said its quarterly revenues were $4.2 billion, edging out analyst estimates of $3.93 billion.
The release of quarterly results from Alcoa is seen as the unofficial start of the earnings season, as the aluminum producer is typically the first Dow component to reports its results. During the day, traders also digested earnings from Ruby Tuesday (RT), Pepsi Bottling Group (PBG) and Family Dollar (FDO) on the day.
Some of the day's selling pressure was mitigated by the results of the Treasury Department's $19.0 billion offering of ten-year notes. The sale drew a high-yield of 3.365 percent while attracting very strong demand, with the bid-to-cover ratio coming in at 3.28, the highest on record. 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 major averages closed on opposite sides of the unchanged mark by slim margins, with the S&P 500 closing modestly lower despite a late-session rally. The Dow closed up by 14.81 points or 0.2 percent at 8,178.41 and the NASDAQ rose by 1 point or 0.1 percent to 1,747.17, while the S&P 500 fell 1.47 points or 0.2 percent to 879.56.
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