» » Hong Kong Stocks May Halt Skid

Hong Kong Stocks May Halt Skid

(RTTNews) – The Hong Kong stock market has finished lower now in back-to-back sessions following the five-day winning streak that saw it gather more than 1,100 points or 9 percent in the process. The Hang Seng Index crashed through support at 13,500 points, but now analysts say the market could recoup much of those losses when it opens for business on the final day of the trading week.

The global forecast for the Asian markets is essentially flat with a touch of upside. Some better than expected economic news out of the United States served to slow down the free fall that stocks have seen through much of this week. The European markets still finished deeply in the red, but some of the U.S. bourses managed to creep into positive territory at the close of trade – and the Asian markets are tipped also for slight gains.

The Hang Seng finished sharply lower on Thursday, dragged to the downside by heavy losses among the financial stocks, commerce issues, industrial shares and the property sector.

For the day, the index lost 310.91 points or 2.3 percent to close at 13,228.3 after trading between 13,478.66 and 13,174.01 on turnover of 39.64 billion Hong Kong dollars.

The financials led the market to the downside as HSBC shed 2.42 percent, while Hang Seng Bank was down 1.65 percent, ICBC shed 3.08 percent, China Construction Bank fell 3.41 percent, BOC Hong Kong lost 2.2 percent, China Life shed 3 percent, Ping An was off 3.36 percent and HKEx was down 2.72 percent.

Also finishing lower, Cheung Kong was down 0.83 percent, while SHK Properties tumbled 3.34 percent, China Mobile was down 2.55 percent, China Unicom was off 2.37 percent, PetroChina fell 3.44 percent, Sinopec was down 3.41 percent, CNOOC lost 2.32 percent and COSCO Pacific tumbled 7.04 percent.

Wall Street offers a mixed lead as stocks moved sharply higher going into the close of trading on Thursday after spending most of the session in negative territory. The Nasdaq and the S&P 500 surged above the unchanged line in late-day trading, but the Dow remained stuck in the red. The weakness seen for much of the trading day came as traders reacted negatively to a mixed bag of economic news. Nonetheless, most stocks rebounded in the final hour of trading.

The retail sales report for the month of January was released before the opening bell, showing an unexpected increase in sales for the month. According to the Commerce Department report, retail sales rose 1.0 percent in January following a revised 3.0 percent decline in December. Economists had expected sales to fall by 0.8 percent compared to the 2.7 percent decrease originally reported for the previous month. The increase came as a surprise, although the growth was largely due to significant discounts by retailers following the weak holiday shopping season.

At the same time, the Labor Department said initial jobless claims in the week ended February 7 fell to 623,000 from the previous week’s revised figure of 631,000. Economists had been expecting claims to fall to 610,000 from the 626,000 originally reported for the previous week. The report also showed that the four-week moving average rose to 607,500 from the previous week’s revised average of 583,500, while continuing claims in the week ended January 31 rose to another new record high of 4.810 million.

The volatility in the markets came as some traders are now looking beyond the proposed economic stimulus bill, waiting for the details of the Obama administration’s financial rescue plan after Treasury Secretary Timothy Geithner’s broad outline of the plan contributed to a sell-off on Wall Street on Tuesday.

The major averages ended the session mixed, with the Dow finishing the day modestly lower. While the Dow closed down 6.77 points or 0.1 percent at 7,932.76, the Nasdaq closed up 11.21 points or 0.7 percent at 1,541.71 and the S&P 500 closed up 1.45 points or 0.2 percent at 835.19.

In economic news, the People’s Bank of China said on Thursday that banks extended 1.62 trillion yuan in new loans in January, up 814.1 billion yuan from the prior year. New loans in China increased at a record pace in January. At the same time, M2, the broadest measure of money supply grew 18.8 percent year-on-year in January, faster than December’s 17.8 percent increase. Broad money supply covers cash in circulation and all deposits. Meanwhile, the narrow measure of money supply, M1 rose 6.68 percent to 16.52 trillion yuan.

In corporate news, Aluminum Corp of China (Chinalco) has proposed injecting $19.5 billion into Rio Tinto Ltd, one of the largest mining corporations in the world. If approved by shareholders and governments, the proposed deal would be the largest overseas investment by a Chinese company in history. Chinalco proposed to buy $7.2 billion of convertible bonds from Rio and stakes in iron ore, copper and aluminum projects for $12.3 billion, the company said. The proposal would result in the company’s stake in Rio increasing to 18 percent from the current 9.3 percent.

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