RTTNews - The Hong Kong stock market headed right back to the upside on Thursday, one day after the end of the four-day winning streak in which it had collected nearly 1,400 points or 7.5 percent on its way to a fresh 10-month closing high. The Hang Seng Index closed above the 20,200-point plateau, and now investors are looking to add to those totals by the opening of trade on Friday.
The global forecast for the Asian markets is broadly positive, with solid gains expected from the financial shares. The continuing rebound among the resources - and the price of oil, in particular - adds to the positive sentiment. Commercial real estate and chemical stocks also are tipped higher. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are tipped to follow suit.
The Hang Seng finished modestly higher on Thursday, lifted by gains among the financial and technology sectors - while the automobile producers and the gold miners finished the session in mixed fashion.
For the day, the index added 98.58 points or 0.49 percent to close at 20,234.08 after trading between 19,955.32 and 20,359.79 on turnover of 76.24 billion Hong Kong dollars.
Among the gainers, HSBC Holdings added 1.24 percent, while Dongfeng Motor Group Co was up 0.98 percent, Sinotruk gained 0.57 percent and Sino Gold Mining added 1.21 percent.
Finishing lower, Denway Motors fell 3.68 percent, while Great Wall Motor Co slid 3.19 percent, Zijin Mining Group shed 1.24 percent, Zhaojin Mining Industry Co fell 2.65 percent and Lingbao Gold eased 0.35 percent.
Wall Street offers a firm lead as stocks posted strong gains on Thursday, fueled by stabilizing earnings and employment figures, while respectable results for a seven-year note auction also boosted equities. The major averages all finished the day firmly in positive territory despite some late session profit taking, closing at their best levels of the year.
Early buying interest was generated as traders reacted positively to the latest earnings and economic data, including the Labor Department's report on first-time claims for unemployment benefits in the week ended July 25. While the Labor Department said jobless claims came in above the average analyst estimate, there were some concerns that claims could have come in substantially higher. Further, the four-week moving average fell for the fifth straight week, dropping to its lowest level since January.
The report said that weekly jobless claims rose to 584,000 from the previous week's revised figure of 559,000. Economists had expected jobless claims to rise to 575,000 from the 554,000 originally reported for the previous week. The report also showed that the less volatile four-week moving average fell to 559,000 from the previous week's revised average of 567,250.
Traders also delved into a slew of earnings reports, with Visa (V) reporting adjusted earnings and revenues that beat estimates. Cigna (CI), Tyco (TYC), Kellogg (K) and Master Card (MA) also surpassed expectations on the bottom line, although revenues largely missed the mark. Meanwhile, energy giant Exxon Mobil (XOM) fell well short of earnings forecasts, although its revenues beat expectations.
Equities saw some modest upside after the results of the Treasury Department's $28.0 billion sale of seven-year notes showed that the auction attracted stronger than expected demand. The sale drew a high-yield of 3.369 percent, while the bid-to-cover ratio came in at 2.63. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major averages ceded considerable ground heading into the close, but they were able to hold onto strong gains. The Dow finished up by 83.74 points or 0.9 percent at 9,154.46, the NASDAQ advanced by 16.54 points or 0.8 percent to 1,984.30 and the S&P 500 rose by 11.60 points or 1.2 percent to 986.75.
In economic news, the Chinese central bank said that it will maintain a moderately loose monetary policy, pledging to adopt market tools to guide the appropriate growth in credit growth. The central bank released the statement after the Chinese stock market recorded its largest one day decline in nearly eight months on concerns that government may require banks to limit lending.
Deputy Governor of the central bank, Su Ning said the PBoC will unswervingly continue to implement appropriately loose monetary policy and consolidate the momentum of economic recovery. He added, We should focus on market oriented tools rather than quantitative style measures, flexibly using various monetary policy tools to promote appropriate monetary and credit growth.
The central bank added that a proactive fiscal policy and moderately loose monetary policy are required to sustain growth.
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