RTTNews - The Hong Kong stock market has finished higher now in back-to-back sessions, collecting more than 450 points or 1.8 percent in the process. The Hang Seng Index closed above the 20,890-point support plateau, but now investors are anticipating a modest correction to the downside when it opens for business on Monday.
The global forecast for the Asian markets is fairly pessimistic, due largely to weaker than expected data out of the United States that indicates a worldwide economic recovery might not be as close as many had thought. Technology shares could remain under pressure, while steel, oil and other commodities also may slide. The European and U.S. markets finished modestly lower on Friday, and now the Asian bourses are expected to continue to trend to the downside.
The SCI finished slightly higher on Friday, as gains among the financials nudged the market into positive territory following mixed performances from the commodities and the properties.
For the day, the index was up 32.03 points or 0.15 percent to finish at 20,893.33 after trading between 20,639.56 and 21,037.17 on turnover of 62.55 billion Hong Kong dollars.
Among the gainers, HSBC Holdings was up 0.12 percent, while CT Holdings jumped 19.44 percent, China Pharmaceutical Group added 2.08 percent, Shandong Luoxin Pharmacy Stock gained 0.76 percent, Zijin Mining Group added 0.58 percent and Lingbao Gold gained 2.47 percent.
Finishing lower, Hong Kong Building and Loan Agency dropped 11.91 percent, while United Laboratories International Holdings shed 0.98 percent, Guangzhou Pharmaceutical lost 2.31 percent, China Shineway Pharmaceutical Group was off 0.67 percent and Sino Gold Mining eased 0.27 percent.
The lead from Wall Street is firmly negative as stocks finished notably lower on Friday, although a late session rally helped to mitigate the pullback prompted by the day's disappointing economic data. The major averages all closed lower by hefty margins, with the day's retreat leading to a lower overall finish for the week.
The decline in equities came following the release of Reuters and the University of Michigan's preliminary report on consumer sentiment for the month of August, which showed that the consumer sentiment index unexpectedly decreased compared to the previous month. The consumer sentiment index fell to a reading of 63.2 in August from a reading of 66.0 in July. The decrease surprised economists, who had been expecting the index to increase to 69.0. Coupled with disappointing retail sales figures released earlier this week, the data indicated that the American consumer is still struggling, prompting the pullback by stocks.
Also on the economic front, the Federal Reserve revealed that industrial production in the month of July increased by more than economists had been anticipating, boosted by a jump in auto production. The data showed that industrial production increased by 0.5 percent in July after falling by 0.4 percent in June. With the increase, industrial production rose for the first time since December of 2007. Economists had been expecting a slightly more modest increase in industrial production of about 0.4 percent.
Earlier, traders looked to figures from the Labor Department showing that consumer prices were unchanged in the month of July, with decreases in food and energy prices offsetting higher prices for apparel and tobacco. The Labor Department said its consumer price index was unchanged in July after increasing by an unrevised 0.7 percent in June. The lack of growth in consumer prices came in line with the expectations of economists. Excluding the decreases in food and energy prices, the core consumer price index edged up 0.1 percent in July following a 0.2 percent increase in the previous month. Economists had expected the index to increase by 0.1 percent.
The major averages saw considerable upside heading into the close, offsetting some of their early losses. The Dow closed down by 76.79 points or 0.8 percent at 9,321.40, the NASDAQ fell by 23.83 points or 1.2 percent to 1985.52 and the S&P 500 slipped by 8.64 points or 0.9 percent to 1004.09. With the losses, the major averages all closed modestly lower for the week following four consecutive weekly gains. While the Dow fell 0.5 percent for the week, the NASDAQ and the S&P 500 posted weekly loses of 0.7 percent and 0.6 percent, respectively.
In economic news, Hong Kong's economy emerged from the worst recession in the second quarter, prompting the government to raise the outlook for this year. Gross domestic product or GDP rose 3.3 percent sequentially in the second quarter after falling 4.3 percent in the first three months of the year, a preliminary report released by the Census and Statistics Department showed on Friday. That was the first increase following declines in four consecutive quarters. Economists had forecast GDP to grow 1.2 percent. On an annual basis, the economy contracted 3.8 percent in the second quarter, significantly slower than the 7.8 percent decline in the first quarter and the expected 5.3 percent fall.
Also, Hong Kong's total credit card receivables decreased 0.3 percent in the second quarter, compared with an 8.1 percent fall in the previous quarter, a report by the Hong Kong Monitory Authority showed on Friday. However, total number of credit card accounts climbed 2.2 percent. The charge-off amount rose to HK$ 815 million in the second quarter or 1.2 percent of average receivables from HK$ 727 million in the previous quarter. On an annual basis, the charge-off ratio increased to 4.61 percent from 3.92 percent in the first quarter.
In corporate news, Chinese independent power producer Datang International Power Generation said Sunday that first-half net profit attributable to equity holders of the company amounted to about RMB722 million, up 53.04 percent from last year. Basic earnings per share attributable to equity holders of the company for the period came in at RMB0.0613, an increase of nearly RMB0.0211 per share from the prior year. Operating revenue increased 18.90 percent to about RMB 20,684 million.
Also, China Sky One Medical, announced that its second quarter net income was $9.5 million or $0.57 per share, compared to net income of $8.1 million, or $0.50 per share, in the second quarter of 2008. Operating income was $12.1 million for the second quarter of 2009, representing a 19.8 percent increase from $10.1 million in the second quarter of 2008. Revenues for the quarter were $32.18 million, compared to $23.75 million in the year ago quarter.
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