RTTNews - The winning streak has reached three sessions for the Hong Kong stock market, which has jumped nearly 700 points or 3.5 percent in that time. The Hang Seng Index closed above the 20,800-point plateau, and analyst believe the market has more upside in Tuesday's trade - although some resistance is predicted at 21,000 points.
The Asian markets can look to considerable optimism in Tuesday's global forecast as a resurgence in commodities and resources is predicted to lead the bourses firmly to the upside. Financials and steel stocks also are expected to provide support. The European and U.S. markets finished with strong gains, and the Asian markets are tipped to follow that lead.
The Hang Seng finished sharply higher on Monday, thanks to significant gains among the industrials, financials and energy producers.
For the day, the index jumped 233.93 points or 1.14 percent to close at 20,807.26 after trading between 20,449.19 and 20,816.61 on turnover of 77.89 billion Hong Kong dollars.
Among the gainers, HSBC added 0.78 percent, while Hang Seng Bank shed 0.87 percent, ICBC was up 0.18 percent, China Construction Bank gained 0.16 percent, Bank of China climbed 1.04 percent, BOC Hong Kong dropped 2.66 percent, China Mobile gained 1.04 percent, CNOOC jumped 3.26 percent, PetroChina added 1.3 percent, Sinopec gained 2.73 percent, China COSCO soared 10.18 percent and COSCO Pacific surged 17.93 percent.
Wall Street offers a broadly positive lead as stocks saw a significant rally on the first trading day of August, fueled by better-than-expected economic data. The major averages all finished in positive territory, with the NASDAQ and the S&P 500 moving past the key technical levels of 2,000 and 1,000, respectively.
Notable buying interest was generated by a report from the Institute for Supply Management that showed a much slower than expected pace of contraction in manufacturing activity in July. The report also showed notable improvements in new orders and production. The ISM said its index of activity in the manufacturing sector rose to 48.9 in July from 44.8 in June, although a reading below 50 indicates a contraction. Economists had been expecting a more modest increase to a reading of 46.5.
Separately, the U.S. Commerce Department revealed that construction spending rose 0.3 percent in June following a revised 0.8 percent slide in May. The figure surprised economists, who had expected a decline of 0.5 percent for the month. The unexpected increase was largely due to a 1.0 percent increase in public construction. While private construction slipped 0.1 percent, residential construction spending was up 0.5 percent.
Some positive sentiment was also generated by news that Ford (F) reported its first increase in U.S. sales in nearly two years in the month of July. Ford said its sales rose 2.3 percent compared to the same month a year ago due in part to the government's Cash for Clunkers program.
In earnings news today, Humana (HUM) and Tyson Foods (TSN) beat Wall Street estimates, while traders are looking forward to the release of results from homebuilding stalwarts Centex (CTX) and Pulte Homes (PHM) after the closing bell this afternoon.
The major averages all closed sharply higher, with the NASDAQ ending the session at its best level of the day. The Dow closed up by 114.95 points or 1.3 percent at 9,286.56, the NASDAQ climbed by 30.11 points or 1.5 percent to 2,008.61, and the S&P 500 rose by 15.15 points or 1.5 percent to 1,002.63. With the gains, the NASDAQ closed above the 2,000 level for the first time since October, while the S&P 500 closed above the 1,000 level for the first time since November. The Dow also set a nine-month closing high.
In economic news, the Chinese Purchasing Managers' Index for the manufacturing sector rose to a twelve-month high of 52.8 in July from 51.8 in June, a monthly survey from the CLSA Asia-Pacific Markets and Markit Economics showed Monday. A reading above 50 indicates expansion in the manufacturing sector. The indicator suggested that manufacturing output improved for the fourth consecutive month, expanding at the most marked rate since May 2008.
In corporate news, HSBC Holdings half-year profit before tax plummeted 57 percent to $5.02 billion from $10.25 billion last year - in line with analyst expectations. Profit attributable to shareholders of the parent company plunged to $3.35 billion from $7.72 billion a year earlier. Earnings per share for the half year fell to $0.21 from $0.57 in the prior year period.
Six-month net interest income decreased to $20.54 billion from $21.18 billion, while net fee income slid to $8.43 billion from $10.99 billion in the comparable period. The board approved a second interim dividend of 8 cents per ordinary share, payable on October 7 with a scrip alternative.
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