RTTNews - The Hong Kong stock market on Friday snapped the two-day losing streak that had cost it more than 600 points or 4 percent in the process. The Hang Seng Index regained the 16,700-point plateau, although investors are bracing for another day of modest decline when the market kicks off trade on Monday.

The global forecast for the Asian markets is modestly negative uncertain economic data and corporate news at the end of last week - and investors also figure to be nervous ahead of more corporate results and data this week. The European markets finished last week in mixed fashion with a slight downside bias, while the U.S. markets ended with modest declines - and the Asian markets are predicted to fall right in between the two leads.

The Hang Seng finished sharply higher on Friday, thanks to bargain hunting among the financial stocks after a rough couple of sessions. Property shares also wound up higher, as did the oil companies.

For the day, the index gained 249.01 points or 1.51 percent to close at 16,790.70 after trading between 16,736.18 and 16,953.41 on turnover of 58.06 billion Hong Kong dollars.

Among the gainers, ICBC jumped 3.6 percent, while HSBC gained 3.1 percent, HKEx was up 1.7 percent, China Construction Bank rose 1.9 percent, Ping An advanced 1.6 percent, China Life was up 0.9 percent, Sinopec was up 1.0 percent, CNOOC added 2.0 percent, Cheung Kong was 1.4 percent higher and SHK Properties gained 1.3 percent.

The lead from Wall Street is downbeat as stocks ended Friday's trading mostly lower after showing a lack of direction throughout much of the session. The major averages all finished the day firmly in negative territory after ending the previous session notably higher. Volatility came as traders digested a slew of economic data that added to investor uncertainty about the outlook for the markets. Below average volume also contributed to the choppy trading.

Before the start of trading, the Labor Department said its consumer price index was unchanged in April after edging down by 0.1 percent in March. The lack of growth in consumer prices came in line with the expectations of economists. While energy prices showed another significant decrease, the 2.4 percent drop in energy prices was offset by a 9.3 percent jump in tobacco prices. Food prices slipped 0.2 percent in April after edging down 0.1 percent in March.

The report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3 percent in April after rising 0.2 percent in each of the three previous months. Economists had expected core prices to edge up 0.1 percent. Additionally, a report from the Federal Reserve showed a slightly smaller than expected 0.5 percent decrease in industrial production in April, while the Reuters/University of Michigan Consumer Sentiment index rose to 67.9 in May from 65.1 in the previous month.

On the earnings front, retailer JC Penney (JCP) reported first quarter earnings that edged out analyst estimates, while Abercrombie & Fitch (ANF) reported a first quarter loss. In other news, ailing automaker General Motors (GM) said Friday that it has started to notify about 1,100 underperforming and very low sales volume U.S. dealers that they will not be retained on a long-term basis. The move is part of GM's updated viability plan submitted last month under which the automaker plans to reduce its current dealer network of 5,969 stores to about 3,600 by the end of 2010.

The major averages all closed notably lower, although off their worst levels of the day. The Dow closed down 62.68 points or 0.8 percent at 8,268.64, the NASDAQ closed down 9.07 points or 0.5 percent at 1,680.14 and the S&P 500 closed down 10.19 points or 1.1 percent at 882.88. With today's losses, the major averages all closed lower for the week, with the NASDAQ snapping a nine-week winning streak. The NASDAQ fell 3.4 percent for the week, while the Dow and the S&P 500 posted weekly losses of 3.6 percent and 5 percent, respectively.

In economic news, the Hong Kong Census and Statistics Department said Friday that the gross domestic product declined 7.8 percent year-on-year in the first quarter compared with a revised 2.6 percent drop in the fourth quarter. Economists had predicted a decline of 5.3 percent. The annual GDP fall was the largest since the third quarter of 1998 when the economy was severely battered by the Asian Financial Crisis, the statistical office said.

On a sequential basis, the GDP dropped a seasonally adjusted 4.3 percent in the first quarter. The GDP for 2009 as a whole is now forecast to contract by 5.5 percent to 6.5 percent in real terms, worse than the forecast decline of 2 percent to 3 percent put out in the budget round.

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