RTTNews - The losing streak has reached three sessions for the Hong Kong stock market, which has given up 420 points or 2.4 percent in the process. The Hang Seng is holding support at 18,100 points, although analysts predict that the market will plunge through the 18,000-point level at the opening of trade on Friday.
The global forecast for the Asian markets is broadly negative, thanks to U.S. jobs data that came in worse than expected, for the moment dashing hopes that the worldwide economic slowdown might be coming to an end. Commodities and financials in particular are expected to fall, especially after the European and U.S .markets ended with heavy losses - and the Asian bourses are also expected to plummet.
The Hang Seng finished sharply lower on Thursday after posting significant gains at the opening following Wednesday's market holiday. Properties led the market to the downside, while financials also ended under water.
For the day, the index lost 200.68 points or 1.09 percent to close at 18, 178.05 after trading between 18,780.96 and 18,053.10 on turnover of 68.38 billion Hong Kong dollars.
Among the decliners, Swire Pacific shed 6.6 percent, while Hang Lung Properties was down 4.5 percent, Wharf Holdings was 4.3 percent lower, Sun Hung Kai Properties fell 1.0 percent and HSBC dropped 2.6 percent.
The lead from Wall Street is sharply lower as stocks lingered near their worst levels of the day throughout the trading session on Thursday after plummeting early on in reaction to disappointing employment data. The major averages all posted steep losses ending the holiday-shortened week on a sour note as the markets will be closed on Friday for Independence Day.
The day's losses came on the heels of a report from the Labor Department showing that non-farm payroll employment fell by 467,000 jobs in June following a revised decrease of 322,000 jobs in May. Economists had expected a decrease of about 365,000 jobs compared to the loss of 345,000 jobs originally reported for the previous month. With the bigger than expected decrease in employment, the unemployment rate edged up to 9.5 percent in June from 9.4 percent in May. The increase lifted the unemployment rate to its highest level since August of 1983, although it was below economist estimates of 9.6 percent.
Following the weak jobs data, traders largely shrugged off a report from the Commerce Department showing that orders for manufactured goods rose 1.2 percent in May following a downwardly revised 0.5 percent increase in April. Economists had expected orders to rise 0.9 percent compared to the 0.7 percent increase originally reported for the previous month.
On the corporate front, auto-parts supplier Lear Corporation (LEA) said that it has reached an agreement with lenders to restructure its debt and said it plans to file for Chapter 11 protection soon. In addition, the company said it had obtained $500 million in bankruptcy financing.
In other news, Walgreen Co. (WAG) said that its comparable store sales for the month of June increased 3.4 percent. Net sales for the month were $5.24 billion, up 9.0 percent from $4.80 billion for the same month in 2008.
Separately, Exelon (EXC) announced an increase in its bid to acquire all of the outstanding shares of NRG Energy (NRG), now offering a fixed exchange ratio of 0.545 of a share, a 12.4 percent increase over the initial exchange offer of 0.485.
The major indices saw further downside late in the session, finishing near their worst levels of the day. The Dow closed down by 223.32 points or 2.6 percent at 8,280.74, the NASDAQ fell by 49.20 points or 2.7 percent to 1,796.52, and the S&P 500 closed down 26.91 points or 2.9 percent at 896.42. For the week the, Dow fell by 1.9 percent, the NASDAQ slipped 2.3 percent and the S&P 500 dropped by 2.4 percent. The week's downward move was largely due to Thursday's retreat.
In economic news, the Hong Kong Census and Statistics Department said on Thursday that the retail sales value decreased 6.2 percent year-over-year in May, after falling 4.3 percent in April, revised from 4.4 percent decline reported initially. Economists were looking for a decline of 8.8 percent.
In volume terms, retail sales dropped 6.4 percent annually in May, compared with a 5.4 percent fall in April, revised from 5.5 percent drop estimated in the preceding report. Economists had expected a drop of 8.7 percent.
For the first five months of the year, retail sales value declined 4.4 percent compared to the same period of the previous year. At the same time, retail sales volume dipped 5.6 percent over a year ago.
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