RTTNews - The Hong Kong stock market has finished lower now in consecutive sessions and in three of four trading days since the end of the seven-day winning streak in which it collected almost 2,900 points or 20 percent on its way to a fresh seven-month closing high. The Hang Seng Index crashed through support at the 17,000-point plateau and tested 16,500 - but investors are looking for the first stages of recovery in Friday's trade.
The global forecast for the Asian markets is modestly higher after a brutal, region-wide decline on the previous trading day - so bargain hunting may be in order, particularly among the financials. Mixed economic and corporate news out of the United States may limit the gains. The European markets ended mixed but not too far from the unchanged line, while the U.S. markets ended higher - and the Asian markets are expected to split the difference.
The Hang Seng finished sharply lower on Thursday, thanks to continued profit taking from last week's winning streak. Property stocks finished sharply lower, while the financials also saw heavy losses.
For the day, the index plummeted 517.93 points or 3.04 percent to close at 16,541.69 after trading between 16,422.28 and 16,630.33 on turnover of 63.65 billion Hong Kong dollars.
Among the decliners, Cheung Kong Holdings fell 5.1 percent, while Hang Lung Properties lost 4.2 percent, Henderson Land dropped 3.7 percent, Sino Land fell 3.4 percent, HSBC fell 4.2 percent, Bank of East Asia dropped 5.6 percent, China Unicom was up 0.23 percent, China Mobile lost 4.2 percent, HKEx plunged 7.1 percent, Sinopec was down 4.6 percent, PetroChina shed 4.2 percent, CNOOC shed 4.3 percent, China Construction Bank fell 1.9 percent, ICBC was down 2.4 percent and Bank of China eased 2.1 percent.
The lead from Wall Street is upbeat as stocks regained some ground during trading on Thursday after seeing substantial weakness in the previous session. The major averages all ended the day firmly in positive territory, as traders picked up stocks at reduced levels. The strength in the markets came as traders went bargain hunting following some recent weakness, shrugging off a report from the Labor Department showing a bigger than expected increase in first-time claims for unemployment benefits in the week ended May 9.
The Labor Department said initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month. Additionally, the report showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2 from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
In other economic news, producer prices increased by a little more than expected in the month of April, according to a separate report released by the Labor Department, with the increase in prices partly due to a rebound in food prices.
On the earnings front, Wal-Mart (WMT) reported first-quarter earnings of $0.77 per share, nearly flat compared $0.76 per share in the same quarter of last year. The earnings came in line with analyst expectations. Meanwhile, consumer electronics giant Sony (SNE) reported a fourth quarter net loss of $1.68 billion or $1.68 per share on revenues of $15.55 billion.
In other news, embattled automaker Chrysler revealed that it is planning to close a quarter of its dealerships as part of its effort to restructure. The announcement came as part of the company's bankruptcy court proceedings. Permission for Chrysler-Fiat to cancel 789 of its 3,188 car dealership agreements has not yet been granted, but Chrysler has said that reducing the number of dealers is essential to its continued viability.
Additionally, President Barack Obama called on Congress to move swiftly to enact stronger regulations of the credit card industry in a town-hall style meeting in New Mexico. The House has already passed a measure commonly called the Credit Card Holders' Bill of Rights and the Senate is debating and amending its own version of the measure this week. Proponents hope the Senate will be able to vote on the bill this week.
While the major averages moved off their highs going into the close, they remained firmly positive. The Dow closed up 46.43 points or 0.6 percent at 8,331.32, the NASDAQ closed up 25.02 points or 1.5 percent at 1,689.21 and the S&P 500 closed up 9.15 points or 1 percent at 893.07.
In economic news, Hong Kong will on Friday announce Q1 GDP figures after the market closes, with analysts looking for a contraction of 5.3 percent on year after the 2.5 percent annual decline in the previous three months.
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