RTTNews - The Hong Kong stock market on Tuesday wrote a finish to the three-day losing streak in which it had shed more than 525 points or 2.5 percent in the process. The Hang Seng Index moved back above the 19,870-point support plateau, but now investors are expecting the market to decline at the opening of trade on Wednesday.
The global forecast suggests that the Asian markets will open under some pressure, with weakness expected particularly from the financial, property and airline sectors. Commodities also may wilt, thanks to a sharp decline in the price of crude oil. The European and U.S. markets all finished sharply lower, and the Asian bourses also are tipped to move firmly to the downside.
The Hang Seng finished modestly higher on Tuesday, thanks to gains among the financials plus mixed performances from the properties and gold miners.
For the day, the index gained 148.11 points or 0.75 percent to finish at 19,872.30 after trading between 19,734.27 and 19,961.74 on turnover of 54.75 billion Hong Kong dollars.
Among the gainers, HSBC Holdings added 1.4 percent, while Kam Hing International Holdings surged 15.71 percent, Beauforte Investors Corporation climbed 15.66 percent, Sun Hung Kai Properties gained 1.05 percent and Zhaojin Mining Industry was up 0.73 percent.
Finishing lower, Oriental Ginza Holdings plunged 13.77 percent, while Tristate Holdings dropped 13.58 percent, SOHO China eased 0.49 percent, Cheung Kong (Holdings) was off 0.27 percent, Zijin Mining Group lost 0.62 percent and Sino Gold Mining fell 4.08 percent.
The lead from Wall Street is broadly negative as stocks saw substantial weakness on Tuesday, when traders saw the day's positive economic news as already priced into the market. The major averages all moved sharply lower, adding to the losses posted in the previous session.
This morning, the Institute for Supply Management released a report showing that its manufacturing index jumped to 52.9 in August from 48.9 in July, with a reading above 50 indicating an expansion in the sector. With the increase, the index rose to its highest level since June of 2007. On average, economists had been expecting a more modest increase by the index to a reading of 50.2, which would have still indicated modest growth in the sector.
Separately, pending home sales increased by much more than expected in the month of July, according to a report released by the National Association of Realtors. The report showed that the pending home sales index rose 3.2 percent to 97.6 in July from a reading of 94.6 in June. The increase, which exceeded economist estimates of 1.5 percent growth, lifted the index to its highest level since June of 2007.
Meanwhile, the Commerce Department released a report showing that construction spending fell 0.2 percent in July following a downwardly revised 0.1 percent increase in June. Economists had expected spending to fall 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.
In corporate news, online auction giant eBay (EBAY) announced that it has signed an agreement to sell its Skype communications unit for about $1.9 billion in cash and a $125 million note.
The major averages ended the session firmly in negative territory, just off their worst levels of the day. The Dow fell by 185.68 points or 2 percent to 9,310.60, the NASDAQ declined by 40.17 points or 2 percent to 1,968.89 and the S&P 500 fell by 22.58 points or 2.2 percent to close at 998.04.
In economic news, Hong Kong's retail sales value decreased 5.5 percent year-on-year in July, following a revised 4.7 percent fall in June, the Census and Statistics Department said on Tuesday. Economists expected sales to drop 6 percent. Meanwhile, retail sales volume fell 5.4 percent, in line with economists' estimates, but faster than a revised 4.1 percent fall in the preceding month. For the first seven months of the year, total retail sales decreased by 4.6 percent in value and 5.4 percent in volume terms compared to the last year.
Also, an index measuring manufacturing activity in China ticked higher to a score of 54.0 in August, the China Federation of Logistics and Purchasing said on Tuesday. That was higher than analyst expectations for a score of 53.5 following the 53.3 reading in July.
Nine of the 11 categories that comprise the index saw gains, while one was lower and the new exports component remained unchanged at 52.1. The index has remained above the boom-or-bust level of 50 points for the sixth consecutive month. A score over 50 indicates expansion, while a reading under 50 signifies contraction.
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