RTTNews - The Hong Kong stock market on Tuesday saw an end to the three-day winning streak that saw it put on nearly 2,000 points or 11 percent on its way to an eight-month closing high. The Hang Seng Index is closing on support at 18,000 points, and now analysts say the market could test that level in Wednesday's trade.

The global forecast provides little guidance for the Asian markets, thanks to fairly directionless trade on mixed economic data and corporate news. Several of the markets have posted major gains in the past week, so a bit of profit taking could be in order. The U.S. markets ended barely higher, while the European bourses finished mixed but close to the unchanged line - and the Asian markets are forecast to follow that latter lead with perhaps a touch of downside bias.

The Hang Seng finished sharply lower on Tuesday, thanks to pressure on the oil stocks, financials and insurance issues. For the day, the index plummeted 499.51 points or 2.64 percent to close at 18,389.08 after trading between 18,300.62 and 18,916.61 on turnover of 101.86 billion Hong Kong dollars.

Among the decliners, HSBC Holdings fell 3.88 percent, while CNOOC eased 1.62 percent, China Oilfield Service dropped 0.66 percent, Sinopec Shanghai Petrochemical lost 3.04 percent, CNPC (Hong Kong) fell 3.96 percent, Sinopec lost 6.22 percent, PetroChina dropped 3.62 percent, China Mobile shed 3.86 percent, China Life Insurance fell 2.82 percent and Ping An Insurance slid 2.33 percent. Finishing higher, China Unicom jumped 10.40 percent and China Telecom was up 2.07 percent.

The lead from Wall Street is mildly positive as stocks were able to end Tuesday's trading mostly higher after seeing choppy trading for most of the session. The major averages all finished the day in positive territory, extending their winning streak for a fourth straight session.

Earlier in the session, traders reacted positively to the release of a report from the National Association of Realtors showing that pending home sales increased by much more than expected in the month of April. The report showed that the pending home sales index rose 6.7 percent to 90.3 in April from a reading of 84.6 in March. Economists had been expecting a much more modest increase by the index of about 0.5 percent.

In corporate news, General Motors revealed that it has entered into a memorandum of understanding with a buyer for its premium off-road brand Hummer. The deal would save around 3,000 jobs in the U.S. Separately, GM said it delivered a total of 191,875 vehicles in May, down 29.6 percent from 272,363 vehicles last year. GM total truck sales were down 22 percent last year, while car sales were down 38 percent compared to a year-ago. The company delivered a total of 1,739 hybrid vehicles in May.

Ford (F) said that its May U.S. sales fell 24.2 percent from a year ago, as vehicle demand continued to shrink in a challenging economic and competitive environment. However, the automaker's May sales were up 20 percent from the previous month, marking the highest sales for any month since July 2008.

Meanwhile, financial services provider JP Morgan Chase (JPM) said it plans to raise around $5 billion in common equity as part of its effort to repay $25 billion of the capital it received from the federal bailout fund. American Express (AXP) has commenced a public offering of $500 million of its common stock. Part of the funding is expected to go to a repurchase of $3.4 billion of preferred shares issued to the U.S. Treasury as part of the Capital Purchase Program.

The major averages ended the day modestly higher, although well off their best levels of the day. The Dow finished up by 19.43 points or 0.2 percent at 8,740.87, the NASDAQ closed up 8.12 points or 0.4 percent, at 1,836.80 and the S&P 500 finished up by 1.87 points or 0.2 percent at 944.74.

In economic news, Hong Kong's Land Registry said on Tuesday sale and purchase agreements for residential units totaled 11,788 in May, up 42.3 percent from the previous year. Month-on-month, transactions grew 19.6 percent.

The total number of sale and purchase agreements for all types of building units received for registration in the Land Registry was 13,067 in May, up 17.2 percent from April. The total consideration of agreements rose 9.1 percent in May from the prior month to HK$44 billion. This was 29.5 percent higher than the amount for May 2008.

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