RTTNews - One day after halting the two-day losing streak that had cost it more than 310 points or 1.5 percent, the Hong Kong stock market turned right back to the downside again on Friday. The Hang Seng Index ended just below the 20,400-point plateau, but now investors are expecting a modest recovery at the opening of trade on Monday.
The global forecast for the Asian markets is optimistic, fueled by better than expected economic data out of the United States. Properties and retail stocks are tipped to move higher, although some of the gains may be capped by profit taking among the commodities following last week's run-up. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are also projected to move higher.
The Hang Seng finished sharply lower on Friday, as mainland China stocks weighed heavily on the market. Financials and property stocks ended under pressure, while the gold miners also finished in the red.
For the day, the index plunged 523.87 points or 2.51 percent to close at 20,375.37 after trading between 20,316.78 and 20,759.56 on turnover of 93.64 billion Hong Kong dollars.
Among the decliners, HSBC Holdings dropped 1.64 percent, while SOHO China fell 4.86 percent, Sun Hung Kai Properties was down 3.33 percent, Cheung Kong shed 4.09 percent, Hutchison Whampoa lost 2.26 percent, Hopson Development Holdings declined 6.09 percent, Henderson Land Development fell 3.75 percent, Agile Property Holdings dropped 6.65 percent, Zijin Mining was off 5.2 percent, Zhaojin Mining Industry lost 5.4 percent, Lingbao Gold was down 4.64 percent and Sino Gold Mining dropped 3.97 percent.
Wall Street offers a broadly positive lead as stocks saw a notable rally on Friday, fueled by the day's encouraging economic data. The major averages all finished in positive territory by notable margins, offsetting some of the losses posted earlier in the week.
Buying interest in stocks was sparked by a Labor Department report showing that the pace of job losses slowed by even more than economists had been anticipating in the month of July. The report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.
Additionally, the Labor Department said that the unemployment rate unexpectedly edged down to 9.4 percent in July from 9.5 percent in June. With the decrease, the unemployment rate fell for the first time since April of 2008.
On the earnings front, American International Group (AIG) and Fannie Mae (FNM) saw mixed reaction to their quarterly results as the firms are lingering in the shadow of receiving government bailout funds last fall.
Meanwhile, Hansen Natural Corp. (HANS), Nvidia (NVDA) and AES Corp. (AES) largely beat estimates. Generally, companies have been able to surpass expectations on the bottom line via cost cutting, as revenue growth was limited by the recent economic conditions.
The major averages ceded some ground in late session trading but still finished with strong gains. The Dow closed up by 113.81 points or 1.2 percent at 9,370.07, the NASDAQ climbed by 27.09 points or 1.4 percent to 2,000.25, and the S&P 500 rose by 13.40 points or 1.3 percent to 1,010.48. With the gains, the major averages all closed higher for the week, marking the fourth consecutive week of gains. The Dow and the S&P 500 posted weekly gains of 2.2 percent and 2.3 percent, respectively, while the NASDAQ rose by a more modest 1.1 percent for the week.
In economic news, the Hong Kong official foreign currency reserve assets increased to US$ 218.1 billion in July from US$ 207 billion in June, the Hong Kong Monetary Authority said on Friday. The international reserves, including unsettled forward contracts stood at US$ 219.8 billion in July, up from US$ 208.2 billion in June. The total foreign currency reserve assets represent about nine times the currency in circulation or 48 percent of Hong Kong dollar M3, the HKMA said.
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