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Hong Kong Shares Face Lower Open

(RTTNews) – The Hong Kong stock market turned lower again on Friday, albeit barely – one day after it had declined nearly 300 points or 1.4 percent. The Hang Seng Index ended just above the 19,780-point plateau, but now analysts are forecasting sharp declines at the opening of trade on Monday.

The global forecast for the Asian markets is decidedly negative, as they get their first chance to respond to disappointing U.S. jobs data. A decline in commodity prices adds to the cautious sentiment, as does weakness among the properties and oil companies. The European and U.S. markets finished sharply lower on Friday, and now the Asian markets are expected to follow suit.

The Hang Seng finished barely lower on Friday, nudged into negative territory by selling among the commodity stocks.

For the day, the index lost 6.64 points or 0.03 percent to finish at 19,780.07 after trading between 19,658.66 and 19,841.68 on turnover of 45.41 billion Hong Kong dollars.

Among the decliners, CNOOC shed 1 percent, while Angang Steel plunged 4.2 percent and Aluminum Corp of China was down 1.7 percent.

The lead from Wall Street is heavily pessimistic as stocks saw significant losses to close out the week on Friday. Worries regarding the escalating European debt crisis weighed on investors, as did the prospects of growth in the U.S. labor market and the oil spill in the Gulf of Mexico. The major averages all closed firmly lower, with the Dow closing below the 10,000 level.

After seeing initial weakness, stocks sharpened their losses as the euro continued to fall amid fears of debt contagion within the European Union. The euro-zone currency fell as low as $1.1955 against the dollar earlier, its lowest level in over four years.

Worries about Hungarian debt spooked traders after the vice chairman of Hungary’s ruling Fidesz party indicated that the nation is facing a debt-crisis much akin to that of Greece. Spain and Portugal also remain areas of concern as the markets wait for the next shoe to drop.

In the U.S., anxieties over the labor market also drove stocks lower, as a jump in May employment reported by the Labor Department was largely attributed to the hiring of temporary census workers. The data showed that non-farm payroll employment increased by 431,000 jobs in May following an unrevised increase of 290,000 jobs in April. The job growth fell short of economist estimates for an increase of about 500,000 jobs.

While the increase in jobs in May marked the fastest pace of job growth since March of 2000, the increase was primarily due to the addition of 411,000 temporary employees to work on the census. At the same time, the private sector added only 41,000 jobs in May.

On the corporate front, BP remained in focus after the company was able to cap the well spilling oil into the Gulf of Mexico.

The major averages all saw additional losses in late-session dealing, closing near their worst levels of the day. The Dow plunged by 323.31 points or 3.2 percent to 9,931.97, the NASDAQ fell by 83.86 points or 3.6 percent to 2,219.17 and the S&P 500 slid by 37.5 points or 3.4 percent to 1,064.88.

With the drop, the major averages erased all of the gains registered earlier this week, seeing steep weekly losses. The Dow and the S&P 500 fell by 2 percent and 2.3 percent, respectively, while the NASDAQ declined by 1.7 percent for the week.

On the corporate front, British banking company HSBC Holdings, the parent company of the HSBC Group, has confirmed that it is likely to sell its private equity fund management businesses in Hong Kong, UK, USA, Canada and the Middle East to the respective management teams. The company is in discussions with the management teams, which are expected to lead to five separate management buy-outs.

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