RTTNews - The Hong Kong stock market on Monday wrote a finish to the three-day winning streak in which it had gained more than 1,050 points or 6.1 percent along the way. The Hang Seng Index remained above the 18,500-point plateau, and now analysts are looking for a quick rebound with the market perhaps testing 19,000 points in Tuesday's trade.
The global forecast for the Asian markets is fairly positive, with strength expected from the financial and oil sectors in particular - although turnout may be light ahead of some key economic data out of the United States later in this holiday-shortened trading week. The European markets finished sharply higher, while the U.S. bourses also ended firmly in the green - and the Asian markets are tipped also to move solidly higher.
An unexpected hike in fuel prices by the Chinese government is expected to affect H-shares, boosting the oil companies but putting pressure on the airlines.
The Hang Seng finished modestly lower on Monday as investors locked in gains from the recent winning streak. Energy stocks ended lower, while the property sector also wound up in negative territory.
For the day, the index eased 71.75 points or 0.4 percent to finish at 18,528.51 after trading between 18,451.76 and 18,687.36 on turnover of 50.04 billion Hong Kong dollars.
Among the actives, PetroChina dropped 0.6 percent, while CNOOC fell 2.3 percent, Chinese Estates tumbled 7.6 percent, Sino Land fell 1.6 percent, Cheung Kong was down 0.9 percent and Citic Pacific jumped 6.7 percent.
Wall Street offers a positive lead as stocks were able to move firmly into positive territory in mid-morning trade on Monday, hovering near their highs for most of remainder of the session after a choppy start. The major averages kicked off the week on a strong note, finishing up by notable margins amid a low volume trading session.
The light volume came as some traders remained on the sidelines ahead of the release of key economic figures later in the week. Traders are looking ahead to data on home prices, consumer confidence, manufacturing and employment.
Amid a light day on the economic front, the sentencing of Bernard Madoff for his $65 billion Ponzi scheme drew some attention, with Madoff receiving the maximum sentence of 150 years in prison. Despite arguments from his defense and words from the former financier himself that he was truly sorry, Judge Denny Chin ensured that Madoff would spend the rest of his life in jail.
On the corporate front, Apple (AAPL) confirmed that CEO Steve Jobs is back at work on a part-time basis, returning after a nearly six-month medical leave during which he underwent a liver transplant. Meanwhile, Northrop Grumman (NOC) saw some strength after it received a contract along with Cobham for the supply of an upgraded vehicle intercom system from the U.S. Army. The contract is valued at up to $2.4 billion.
The major indices all closed higher, with the Dow and the S&P 500 finishing near their best levels of the day. The Dow closed up 90.99 points or 1.1 percent at 8,529.38, the NASDAQ closed up 5.84 points or 0.3 percent at 1,844.06, and the S&P rose 8.33 points or 0.9 percent to 927.23.
In economic news, Governor of the People's Bank of China, Zhou Xiaochuan and Chief Executive of the Hong Kong Monetary Authority, Joseph Yam on Monday signed a supplementary Memorandum of Cooperation to prepare for the implementation of the pilot scheme for the use of renminbi in settling cross-border trade transactions between mainland China and Hong Kong.
The Hong Kong Monetary Authority said once the administrative rules are promulgated, banks in Hong Kong would be able to offer related services to firms using renminbi to settle trade transactions with their counterparts on the mainland.
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