The Hong Kong stock market on Tuesday wrote a finish to the modest two-day winning streak that saw it add nearly 170 points or 1.3 percent along the way. The Hang Seng Index fell through support at 15,300 points, although investors are hopeful that the market will turn back to the upside again on Wednesday.

The global forecast for the Asian markets is fairly optimistic, despite some weaker than expected corporate earnings news. But the financials are expected to climb following positive comments from U.S. Treasury Secretary Timothy Geithner. The European markets were mixed and largely near the unchanged line, while the U.S. markets ended sharply higher - and the Asian markets are tipped to land somewhere in between.

The Hang Seng finished sharply lower on Tuesday, thanks to pressure on the financials, property stocks and telecoms.

For the day, the index plummeted 465.02 points or 3.0 percent to finish at 15,285.89 after trading between 15,065.59 and 15,332.27 on turnover of 57.54 billion Hong Kong dollars.

The financials led the market to the downside as HSBC fell 5.1 percent, while Bank of China was down 0.33 percent, Industrial and Commercial Bank of China slid 2.00 percent, China Construction Bank slipped 2.74 percent, China Merchants Bank tumbled 2.93 percent, Bank of Communications was down 1.55 percent and Hang Seng Bank tumbled 0.91 percent.

Also finishing lower, China Mobile fell 5.1 percent, while New World Development fell 5.8 percent, Sun Hung Kai Properties tumbled 3.97 percent, SOHO China fell 4.59 percent, Cheung Kong slid 2.52 percent, Hutchison Whampoa slipped 2.81 percent, Henderson Land Development fell 4.29 percent, CNOOC shed 5.26 percent, China Oilfield Service slid 3.19 percent, Sinopec eased 1.93 percent and PetroChina dropped 3.19 percent.

Wall Street offers a broadly positive lead as stocks showed a strong upward move over the course of the trading day on Tuesday, partly offsetting the steep losses posted in the previous session. While stocks saw initial weakness on disappointing earnings news, a positive reaction to comments from Geithner drove the markets higher.

The initial weakness came after Dow component Merck (MRK) reported first quarter earnings that fell short of analyst estimates and lowered its full year revenue guidance. Caterpillar (CAT) also slashed its full-year guidance, although it reported much better than expected adjusted first quarter earnings.

In other earnings news, chemical giant DuPont (DD) reported first quarter earnings that fell year-over-year and lowered its full-year guidance. The company's downwardly revised earnings guidance brought it in line with analyst estimates.

The turnaround by the markets was partly due to comments from Geithner, who assured the Congressional Oversight Panel that there is enough money left in the government's $700 billion financial rescue program to stabilize the financial system. Geithner said there is at least $134.4 billion in funds left. The Treasury Secretary also said that the vast majority of U.S. banks have enough capital and hinted that the credit markets may be thawing following their deep freeze.

Indicators on interbank lending, corporate issuance and credit spreads generally suggest improvements in confidence in the stability of the system and some thawing in credit markets, Geithner said.

The major averages moved to the upside going into the close, ending the session at or near their best levels of the day. The Dow closed up 127.83 points or 1.6 percent at 7,969.56, the NASDAQ closed up 35.64 points or 2.2 percent at 1,643.85 and the S&P 500 closed up 17.69 points or 2.1 percent at 850.08.

In economic news, the Hong Kong Monetary Authority said on Tuesday that the composite interest rate dropped 4 basis points to 0.29 percent at the end of March from 0.33 percent at the end of February. The composite interest rate is a measure of the average cost of funds of banks.

The monetary authority said the decline in the composite interest rate in March was mainly brought about by downward adjustments in time deposit rates, which more than offset the increases in short-term inter-bank rates. Further, the monetary authority said an increase in liquidity in the banking system was responsible for the fall in the banks' average funding costs.

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