RTTNews - The Hong Kong stock market has finished lower now in back-to-back sessions, giving away more than 250 points or 1.3 percent in the process. The Hang Seng Index remained above the 19,200-point level, although investors are bracing for modest declines when the market opens for business on Thursday.
The global forecast for the Asian markets is a study in contrasts as expected strength in the technology sectors is likely to be offset by falling oil stocks reacting to a decline in the price of oil. The day's corporate earnings results are also unlikely to spark momentum. The European and U.S. markets finished in mixed fashion but did not stray too far from the unchanged line in either direction - and the Asian markets are expected to show little movement with perhaps a slight downside bias.
The Hang Seng finished sharply lower on Wednesday, dragged to the downside by weakness among the financial and telecom sectors. For the day, the index shed 253.56 points or 1.30 percent to close at 19,248.17 after trading between 19,224.05 and 19,641.75.
Among the decliners, HSBC fell 2.2 percent, while Hang Seng Bank slid 0.9 percent, Ping An shed 2.6 percent, China Mobile eased 2.3 percent, China Unicom dropped 2.0 percent and China Telecom lost 0.7 percent.
Wall Street offers an inconsistent lead as stocks finished on a mixed note after choppy trade throughout Wednesday's session, reacting to the latest earnings results with low volume. The major averages closed on opposite sides of the unchanged mark, largely unable to extend their recent run-up.
Earlier this morning, traders delved into quarterly results from a number of big-name companies including Apple (AAPL), Yahoo! (YHOO), Pfizer (PFE) Boeing (BA), Morgan Stanley (MS), Wells Fargo (WFC), and PepsiCo (PEP). The reports saw mixed reaction, however, as most firms met or beat estimates by cost cutting rather than through revenue growth.
In other news, Federal Reserve Chairman Ben Bernanke redelivered his address regarding monetary policy before the Senate Banking Committee while also fielding questions regarding the current and near-term economic outlook. In his prepared remarks, Bernanke reiterated that the U.S. economy is showing signs of stabilization, although he noted that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
Questioning the Fed chief, Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee, noted that while some signs of economic recovery have been seen on Wall Street, the benefits have yet to make it to Main Street.
Bernanke conceded that unemployment is the most pressing issue facing the Fed, but he noted that there are steps that Congress could take to ease the situation, similar to the already-passed extension of unemployment benefits. He said one serious concern was that the long-term unemployed might see their job skills atrophy, leaving them unqualified for work once the economy recovers. Extending job training programs might be one response Congress should consider, the Fed chief said.
The major averages moved sideways in late session dealing to cap off a lackluster trading day. While the NASDAQ eked out a gain of 10.18 points or 0.5 percent, finishing at 1,926.38, the Dow fell by 34.68 points or 0.4 percent to 8,881.26. Further, the S&P 500 slipped by 0.51 points or 0.1 percent to close at 954.07.
In economic news, Chinese Foreign Minister Yang Jiech said on Wednesday that the Association of South East Asian Nations (ASEAN), Japan, China and South Korea need to boost financial co-operation to address regional risks.
We should vigorously intensify cooperation among finance departments, central banks and financial regulatory authorities of the ASEAN Plus Three countries, Yang said at the ASEAN+3 Foreign Ministers' meeting in Thailand.
With regard to the Chiang Mai Initiative Multilateralisation, an agreement launched in 2000 in the Thai town of Chiang Mai between the 13 countries to address short-term liquidity difficulties in the region, Yang said the ASEAN+3 countries should strive to conclude the CMIM Agreement and make operational the self-managed reserve pooling arrangement before the end of the year.
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