RTTNews - The Hong Kong stock market continued to alternate between positive and negative finishes, although it finally managed to pull away from the fairly tight range that had dominated it through the past week. The Hang Seng Index closed above the 20,400-point support plateau, although now analysts warn that the market could hand those gains right back at the opening of trade on Tuesday.
The global forecast for the Asian markets provides little in the way of guidance as weakness among the financials and retail stocks is expected to be offset by gains among the oil and steel shares. The European markets finished on a positive note, while the U.S. markets ended little changed - and the Asian markets also are likely to trade in mixed fashion but may fall prey to profit taking following strong rallies on Monday.
The Hang Seng finished sharply higher on Monday, riding strength from mainland China stocks. Financials ended higher, as did the telecoms and the gold miners.
For the day, the index jumped 336.92 points or 1.67 percent to close at 20,535.94 after trading between 20,433.61 and 20,649.96 on turnover of 62.22 billion Hong Kong dollars.
Among the gainers, HSBC Holdings gained 1.87 percent, while SinoMedia Holding plunged 16.67 percent, China Mobile shed 1.19 percent, China Unicom added 2.98 percent, China Telecom Corp was up 1.3 percent, ZTE jumped 5.37 percent, Zijin Mining climbed 3.13 percent, Zhaojin Mining Industry gained 2.79 percent, Lingbao Gold was up 2.96 percent and Sino Gold Mining surged 7.01 percent.
The lead from Wall Street is virtually flat with perhaps a touch of downside as stocks moved back to the downside over the course of the trading session on Monday, ending the day nearly unchanged after seeing some early strength. The major averages closed on opposite sides of the unchanged mark.
This morning, traders reacted to comments from a number of central bankers over the weekend at the Federal Reserve conference in Jackson Hole, Wyoming, indicating that interest rates are likely to remain fixed for some time despite some signs of economic stabilization. At the conference, Federal Reserve Chairman Ben Bernanke said, Economic activity appears to be leveling out, both in the United States and abroad. Bernanke also noted that the prospects for a return to growth in the near term appear good.
However, the optimism was partly offset by comments from economist Nouriel Roubini, who said that he sees a big risk of a double recession in an article for the Financial Times. Roubini, who predicted the magnitude of the recent financial crisis, stated that the global economy might bottom out in the second half of the year and that the economies in the U.S and other European countries might witness anemic or below trend growth for at least a couple of years.
The pullback by the markets was also partly due to comments from Sun Trust (SIT) CEO James Wells, who said that financial institutions are likely to incur further losses amid the dismal condition of the commercial real estate market.
In other news, conflicting reports have led to speculation over the health of Bernard Madoff, perpetrator of the largest Ponzi scheme in history, who may be dying of cancer at a federal prison in North Carolina. However, prison officials have refuted the cancer claim that a number of media outlets reported earlier.
The major averages saw choppy movement in late session dealing, resulting in a mixed close to kick off the week. While the Dow closed up by 3.32 points or less than a tenth of a percent at 9,509.28, the NASDAQ slipped by 2.92 points or 0.1 percent to 2,017.98 and the S&P 500 fell by 0.56 or 0.1 percent to 1,025.57.
In economic news, Hong Kong will on Tuesday release July data for imports, exports and trade balance. Imports are predicted to decline 15 percent on year following the 7.9 percent annual decline in June. Exports are called lower by 12 percent after the 5.4 percent fall in the previous month. The trade balance is expected to show a deficit of $13.4 billion following the $16.5 billion shortfall a month earlier.
In corporate news, China Nepstar Chain Drugstore announced that its second quarter net income attributable to ordinary shareholders was RMB 30.13 million or US$4.4 million, compared to net income of RMB 56.06 million in the year ago quarter. Earnings per American depositary share for the quarter were RMB 0.28 or US$0.04, compared to RMB 0.52 last year.
The total number of outstanding ordinary shares of the Company as of June 30, 2009 was 208 million. The weighted average number of ADSs for the second quarter of 2009 was 105 million. Revenue for the quarter was RMB 534.12 million or US$78.20 million, compared to revenue of RMB 585.15 million for the same period in 2008, and revenue of RMB497 million for same period in 2008 on a pro forma basis.
Also, China Digital TV Holding said it has signed an exclusive contract with Jinzhong Broadcasting Television Network to provide proprietary cross-platform set-top box software solutions on all digital TV set-top boxes in the operator's jurisdiction covering approximately 300 thousand cable subscribers. China Digital TV's set-top box software solutions allow cable operators to offer applications such as video-on-demand, time shifting and TV gaming under a unified interface and to expand and upgrade their services across set-top boxes provided by multiple manufacturers.
Finally, Aluminum Corp of China Ltd (Chalco) saw a net loss of 1.63 billion yuan for the second quarter, posting a loss for the third consecutive quarter. The loss was bigger than an average forecast of a 445 million yuan loss compared with a revised profit of 1.14 billion yuan in the same period last year. For the first half of 2009, Chalco posted a loss of 3.52 billion yuan against a revised net profit of 2.39 billion yuan a year ago and a forecast of 2.4 billion yuan loss.
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