RTTNews - The Hong Kong stock market on Thursday halted the two-day losing streak that had cost it more than 250 points or 1.3 percent in the process. The Hang Seng Index closed above the 19,800-point level at a 10-month high, and now analysts predict that the market could add to those gains at the opening of trade on Friday - perhaps testing the 20,000-point level.
The global forecast for the Asian markets is firmly optimistic, with modest gains predicted for the housing and property sectors. Continued good news on the corporate earnings front is expected to add to the positive sentiment, along with solid economic data out of the United States. The European and U.S. markets finished with significant gains, and the Asian markets are also predicted to open higher.
The Hang Seng finished sharply higher on Thursday, fueled by gains among the financials and the property stocks. The metal producers also finished firmly higher, as did the H-shares from mainland China.
For the day, the index surged 569.53 points or 2.96 percent to finish at 19,817.70 after trading between 19,415.37 and 19,824.18 on turnover of 74.04 billion Hong Kong dollars.
Among the gainers, HSBC rose 2.7 percent, while China Construction Bank rose 3.6 percent, Bank of Communications gained 5.2 percent, Bank of China added 2.4 percent, China Life Insurance was up 5.0 percent and Ping An Insurance added 2.5 percent.
The lead from Wall Street is broadly positive as stocks staged a substantial rally following an encouraging report on existing home sales after a modest upward move at the opening bell on Thursday. The major averages all closed in positive territory by substantial margins, with the NASDAQ able to extend its winning streak for the twelfth straight session.
Earlier, buying interest was generated by data from the National Association of Realtors that showed that existing home sales increased for the third consecutive month in June. Existing home sales rose by 3.6 percent to an annual rate of 4.89 million units in June from a downwardly revised rate of 4.72 million in May. Economists had expected sales to rise to a 4.84 million unit rate from the 4.77 million unit rate originally reported for the previous month.
Although a separate report from the Labor Department showed that jobless claims rose in June, the figure rose by slightly less than economists had expected. First-time claims in the week ended July 18th rose to 554,000 from the previous week's revised figure of 524,000. Economists had expected jobless claims to increase to 557,000 from the 522,000 originally reported for the previous week.
Traders also delved into a series of earnings reports, with 3M (MMM), Ford (F) and Wyeth (WYE) reporting results that surpassed Wall Street estimates. McDonald's (MCD), AT&T (T), Qualcomm (QCOM) also beat forecasts, although by more modest margins.
The major averages gave back some ground going into the close, although they held onto standout gains. The Dow closed up by 188.03 points or 2.1 percent at 9,069.29, the NASDAQ advanced by 47.22 points or 2.5 percent to 1.973.60 and the S&P 500 rose by 22.22 points or 2.3 percent to 976.29.
In economic news, China's rapid and vigorous policy response helped the country to mitigate the economic downturn and facilitate an economic recovery during the course of this year and into 2010, the International Monetary Fund or IMF said.
After concluding its Article IV consultation with the People's Republic of China, the Executive Board of the IMF said China has been hit hard by the global economic crisis, a slowdown in the real estate market, and the overhang caused by excess capacity in various industries. Exports have fallen dramatically and growth is now at its lowest point in more than a decade.
The Chinese government has responded with decisive monetary and fiscal policies, offsetting the drag from declining world demand and falling private investment. Monetary policy has also been loosened.
However, IMF officials urged China to take more reforms as demand continued to remain sluggish. They recognized that the uncertain pace and timing of the global recovery would make it much harder for global demand to absorb increased production capacity from China.
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