The Hong Kong stock market on Tuesday saw an end to the winning streak that had stretched to three sessions while adding nearly 1,500 points or 10.5 percent in the process. The Hang Seng Index fell through support at 15,000 points, and now analysts are predicting that those losses will accelerate at the opening of trade on Wednesday.

The global forecast for the Asian markets is broadly pessimistic, since the start of the corporate earning season was as bad as expected. Some other weak economic and corporate news added to the negative sentiment, which dragged the European and U.S. markets sharply lower - and the Asian markets are on track to follow that lead.

The Hang Seng finished modestly lower on Tuesday, thanks to weakness among the financials, properties and China-related stocks. For the day, the index retreated 69.07 points or 0.46 percent to close at 14,928.97 after trading between 14,743.71 and 14,994.76 on turnover of 50.93 billion Hong Kong dollars.

Among the decliners, Henderson Land shed 2.84 percent, while Wharf Holdings lost 4.78 percent, SHK Properties fell 1.84 percent, New World Development slipped 2.63 percent, Hang Lung Property was down 1.42 percent, HSBC Holdings dropped 1.63 percent, BOC Hong Kong lost 1.28 percent, Ping An lost 3.69 percent, China Life slipped 1.08 percent, Aluminum Corporation of China (Chalco) fell 3.00 percent, CNOOC lost 3.07 percent, PetroChina declined 2.08 percent, China Mercantile Holdings lost 4.64 percent and China Overseas was down 0.92 percent.

Finishing higher, Bank of Communications gained 1.67 percent, while Bank of East Asia advanced 3.93 percent, ICBC added 1.67 percent and China Resources gained 1.35 percent.

The lead from Wall Street is sharply negative as stocks saw some further downside during trading on Tuesday after ending the previous session mostly lower. The major averages all ended the day firmly in negative territory, pulling back further off their recent highs, as traders continued to do some profit taking. The continued weakness in the markets came as traders expressed some anxiety about the upcoming earning season and stocks' ability to sustain the recent upward move in light of expectations of weak quarterly results.

After the bell, aluminum producer Alcoa Inc. reported a net loss for the first quarter, hurt by the impact of the economic downturn on its core industrial and commercial markets as well as an historic decline in aluminum prices. The company's quarterly loss per share also came in worse that what analysts had predicted. The company reported a net loss for the first quarter of $497 million or $0.61 per share, compared to net income of $303 million or $0.37 per share for the year-ago quarter.

This marks the second straight quarterly net loss for Alcoa, which reported a net loss of $1.2 billion or $1.49 per share for the fourth quarter in January. However, with most companies expected to report disappointing first quarter results due to the weakness in the economy, the guidance provided by the companies is likely to have a more significant impact on the markets.

Some selling pressure was also generated by a report from the Times of London, which said that new forecasts from the International Monetary Fund are expected to suggest that toxic debts racked up by banks and insurers could spiral to $4 trillion.

In other corporate news, Royal Bank of Scotland (RBS) announced that it has begun consulting Unite and other employee representatives about a business plan for its back office operations that will involve job losses. The bank said that the plan could affect up to 9,000 jobs over the next two years, including 4,500 in the U.K. However, the actual number of jobs lost is expected to be significantly lower.

The major averages all posted steep losses on the day, with the Dow closing down 186.29 points or 2.3 percent at 7,789.56, while the Nasdaq closed down 45.10 points or 2.8 percent at 1,561.61 and the S&P 500 closed down 19.93 points or 2.4 percent at 815.55.

In economic news, the Hong Kong Monetary Authority said on Tuesday that the official foreign currency reserve assets stood at US$ 186.2 billion at the end of March, up from US$ 177.1 billion at the end of February. The foreign currency reserve assets of US$186.2 billion represent about eight times the currency in circulation or 45 percent of Hong Kong dollar M3. Hong Kong was the eighth largest holder of foreign currency reserves after Mainland China, Japan, Russia, Taiwan, India, Brazil and Korea, the agency said.

Also, the World Bank said on Tuesday that a stronger economic growth in China will boost activities in countries in the East Asia and Pacific region. The global lender forecast real GDP growth in developing East Asia to slow to 5.3 percent this year from 8 percent in 2008. It was also down from the bank's earlier forecast of 6.7 percent growth. Developing East Asia excludes Japan, South Korea, Singapore, Hong Kong, Taiwan and the Indian subcontinent.

The World Bank said China remains a bright spot in the region and the global economy amid signs that economic activity may be bottoming out. A recovery in China, likely to begin this year and take full hold in 2010, should contribute strongly to the region's recovery, the bank added.

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