RTTNews - The Hong Kong stock market has finished higher now in three consecutive sessions, adding nearly 850 points or 4.5 percent on its way to its highest closing level so far this year. The Hang Seng Index is closing on the 18,900-point plateau, but analysts are suggesting that the market will instead show a slight decline at the opening of trade on Monday.
The global forecast for the Asian markets offers little in the way of guidance. Some modestly positive economic news out of the United States is likely to be offset by geopolitical tensions regarding North Korea's stated intention to conduct further nuclear tests. The violence and protests surrounding the Iranian election between President Mahmoud Ahmadinejad and challenger Mirhossein Mousavi add to the uncertain sentiment. The European markets were mostly lower on Friday and the U.S. bourses ended nearly unchanged, and the Asian markets are expected to fall in between with mild losses.
The Hang Seng finished modestly higher on Friday, recovering from a mild retreat in morning trade. The financials saw significant support, while the telecoms ended lower on profit taking.
For the day, the index gained 98.65 points or 0.52 percent to close at 18,889.68 after trading between 18,707.19 and 19,161.97 on turnover of 78.98 billion Hong Kong dollars.
Among the actives, HSBC rose 3.5 percent, while China Construction Bank added 2.9 percent, Industrial & Commercial Bank of China was 2.4 percent higher, Li & Fung gained 6.2 percent and China Mobile fell 1.9 percent.
The lead from Wall Street is virtually flat as stocks finished on a mixed note on Friday following a muted reaction to some encouraging news this morning. The week's trading was slowed by below average volume, which prompted limited movement in the equity markets. Some investors have moved to the sidelines ahead of the usual calm of the summer season.
Earlier, trading on the New York Stock Exchange was disrupted by a breakdown in three servers, halting trading in 240 stocks. Several companies were forced to stop trading for a limited period, including Bank of America (BAC), General Electric (GE), Exxon Mobil (XOM) and Merck (MRK).
On the economic front, consumer sentiment continued to improve in the month of June, according to a report released by Reuters and the University of Michigan, although the reading rose by less than expected. The report showed that the preliminary reading of the consumer sentiment index for June came in at 69.0 compared to a reading of 68.7 in May. Economists had been expecting a somewhat more notable increase to a reading of 69.5.
Separately, a report from the Labor Department showed that import prices climbed by 1.3 percent in May, compared to a 1.1 percent increase in April. Export prices also rose, climbing by 0.6 percent in May following an increase of 0.4 percent in the previous month. Compared to the same month a year ago, import prices fell 17.6 percent, while export prices slipped by 6.5 percent.
In other news, White House National Economic Council Director Larry Summers stated that the goal of the Obama administration is to end its involvement in private industry as soon as possible. Speaking at the Council on Foreign Relations in New York, Summers said that the interventions were necessary and called for a new approach to too big to fail.
The major averages eventually ended the session on opposite sides of the unchanged line. While the NASDAQ closed down 3.57 points or 0.2 percent at 1,858.80, the Dow closed up 28.34 points or 0.3 percent at 8,799.26 and the S&P 500 closed up 1.32 points or 0.1 percent at 946.21. Despite the mixed performance for the session, the major averages all posted modest weekly gains. The Dow rose 0.4 percent for the week, while the NASDAQ and the S&P 500 posted weekly gains of 0.5 percent and 0.7 percent, respectively.
In economic news, Hong Kong's Census and Statistics Department said on Friday that the industrial production dropped 10.2 percent year-over-year in the first quarter, compared with a 10.6 percent fall in the fourth quarter, revised from 10.4 percent decline reported initially.
Meanwhile, industrial producer price index decreased 1.4 percent year-on year in the first quarter, in contrast to a 3.9 percent increase in the previous quarter. Sequentially, industrial production decreased a seasonally adjusted 2.9 percent in the first quarter, while industrial producer prices fell 2.5 percent.
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