Hong Kong Shares May Turn Lower Again

By @ibtimes on

RTTNews - The Hong Kong stock market on Friday ended the three-day losing streak in which it had shed 420 points or 2.4 percent in the process. The Hang Seng barely regained support at 18,200 points, although investors are expecting that the market could resume its downward trend at the opening of trade on Monday.

The global forecast for the Asian markets provides little in the way of guidance, especially with no lead from Wall Street as the U.S. bourses were closed on Friday in observance of Independence Day. With the absence of any fresh data, many investors are expected to remain on the sidelines - especially with Q2 earnings season kicking off later this week. The European markets finished slightly lower on Friday, and the Asian markets are expected to track flat to mildly negative.

The Hang Seng finished barely higher on Friday, boosted by gains among the oil companies and the coal producers. For the day, the index was up 25.35 points or 0.1 percent to close at 18,203.40 after trading between 17,894.81 and 18,234.24 on turnover of 68.4 billion Hong Kong dollars.

Among the actives, Sinopec gained 1.5 percent, while China Shenhua rose 2.3 percent, Shanghai Shenhua Energy added 5.2 percent, Melco International Development plummeted 5.8 percent and Hunan Nonferrous Metals lost 3.1 percent.

The lead from the European markets is mildly negative as markets fell in light volume for the second straight day on Friday, as a report showed Eurozone retail sales dropped more than expected in May and mining stocks edged lower after copper prices declined. Eurozone retail sales fell 0.4 percent month-on-month in May following a revised increase of 0.1 percent in April, data released by the Eurostat showed. Economists had expected a drop of just 0.1 percent.

The FTSEurofirst 300 index of pan-European blue chips closed 0.06 percent lower at 842.52 points, while the narrower DJ Stoxx 50 index rose 0.06 percent to 2,077.28 points. Around Europe, Germany's DAX index fell 0.22 percent to 4,708.21, while the U.K.'s FTSE 100 index rose 0.05 percent to 4,236.28 and France's CAC 40 index surged up 0.10 percent to 3,119.51.

Metro, Germany's biggest retailer, slipped 2.5 percent, as European retail sales dropped more than economists estimated. BHP Billiton, the world's biggest miner, fell 1.4 percent, while Anglo American, the second biggest, declined 1.2 percent and Rio Tinto, the third biggest, slipped 2.2 percent. EDF, Europe's biggest power producer, dropped 4.5 percent after Morgan Stanley downgraded the stock to equal weight from overweight.

On the other hand, banking stocks were among the top gainers. HSBC, Europe's largest bank, rose 1.7 percent, while Royal Bank of Scotland, Britain's second largest bank, climbed 2.3 percent and Barclays, Britain's third largest bank, surged up 2.7 percent. BNP Paribas, France's largest bank, gained 2 percent and Deutsche Bank, Germany's biggest lender, added 1.7 percent.

In economic news, Taiwan is on Monday scheduled to announce June figures for its consumer and wholesale price indices. Inflation is expected to retreat 1.5 percent on year following the 0.08 percent annual contraction in May. WPI is called lower by 14.44 percent on year after falling an annual 13.45 percent in the previous month.

In economic news, People's Bank of China Governor Zhou Xiaochuan said on Friday there is a need to pay adequate attention to the micro causes of the current crisis and strengthen regulation. Addressing a global think tank summit in Beijing, Zhou said, The causes for the outbreak of this crisis were very complex. Factors both at the macro and micro levels had played some roles.

Zhou said the crisis originated from Wall Street and many indisputable facts have established that micro factors had played an overwhelmingly important role in causing this crisis. Further, he noted that to what extent macro factors have contributed to the crisis has always been subject to dispute, including the role of global imbalances.

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