(RTTNews) - The Hong Kong stock market on Tuesday saw an end to the winning streak that had reached three sessions, gathering more than 1,300 points or 8.5 percent along the way. The Hang Seng Index maintained support at 15,500 points, and now analysts say that the market could test resistance at 16,000 points when it kicks off trade on Wednesday.

The global forecast calls for modest gains for the Asian markets, thanks to continued strength among the commodities and optimism over the coming administration of U.S. President-elect Barack Obama, which is now less than two weeks away. The European markets were broadly higher, and the U.S. markets saw more modest gains - and the Asian bourses are predicted to move to the upside as well.

The Hang Seng finished modestly lower on Tuesday, thanks mainly to profit taking in the financial and telecom sectors - although gains among the property stocks helped to offset those losses.

For the day, the index shed 53.80 points or 0.4 percent to close at 15,509.51, after trading between 15,367.93 and 15,651.61 on turnover of 53.92 billion Hong Kong dollars.

Among the decliners, HSBC was down 0.7 percent, while China Mobile fell 2.4 percent and China Unicom fell 5.3 percent. Bucking the trend, Henderson Land jumped 4.4 percent, while Sun Hung Kai Properties rose 4.2 percent and Standard Chartered added 8.2 percent.

The lead from Wall Street is cautiously optimistic as stocks saw some volatility over the course of the session before ending Tuesday’s trading firmly in positive territory, although well off their highs. The choppy trading came as investors responded to a mixed bag of economic news and remarks by Obama.

On the economic front, reports on service sector activity, factory orders, and pending home sales painted a mixed picture of the economy. The Institute for Supply Management said that its index of activity in the service sector rose to 40.6 in December from a record low of 37.3 in November, although a reading below 50 still indicates a contraction in the sector. Economists had expected the index to edge down to 37.0.

At the same time, the government issued its report on November factory orders, showing a decline of 4.6 percent following a revised 6.0 percent decrease in October. Factory orders were expected to decline 2.6 percent in November. Similarly, weakness was also seen in the pending home sales report that was released by the National Association of Realtors. Pending home sales fell by 4.0 percent to a record low in November, while analysts had expected pending sales to fall by a more modest 1.0 percent.

In other news, President-elect Barack Obama said Tuesday that he expects to inherit a $1 trillion federal deficit, a burden that will likely extend into the next few years. Subsequently, Obama said he and his team want to instill a “sense of responsibility” about future budget choices. That “sense of responsibility” includes a ban on all earmarks from the economic stimulus package he hopes to sign soon after he takes office on January 20th. The president-elect met with both Democrat and Republican lawmakers Monday to discuss his proposed package, aiming at a swift passage following his inauguration.

Meanwhile, the forecast from members of the Federal Open Market Committee deteriorated significantly in the period between their October and December meetings, the minutes from the FOMC’s December meeting revealed. The policy-making arm of the Federal Reserve is expecting economic weakness to extend throughout 2009, a bleak outlook that prompted them to slash the federal funds rate to record low levels.

By the close of trading, the major averages were well off their best levels of the day, but they held onto strong gains. The Dow closed up 62.21 points or 0.7 percent at 9,015.10, the Nasdaq closed up 24.35 points or 1.5 percent at 1,652.38 and the S&P 500 closed up 7.25 points or 0.8 percent at 934.70.

In economic news, Hong Kong will on Wednesday provide December data for FX reserves, with analysts expecting a surplus of $160.2 billion - down from $165.9 billion a month earlier.

Also, the total number of sale and purchase agreements for all types of building units received for registration in Hong Kong fell 22.2 percent year-on-year in 2008, the Land Registry said Tuesday. The value of these agreements totaled 413.11 billion Hong Kong dollars, representing a decline of 21.4 percent on year. In 2008, there were162,912 building units assignments were lodged for registrations. This was an increase of 2.9 percent compared with 158,287 in 2007.

In corporate news, Shanghai Pudong Development Bank saw net earnings for 2008 jump 127 percent on year, the bank said on Tuesday, standing at 12.5 billion yuan. Earnings per share rose by the same rate to 2.21 yuan, the bank said, while total revenue was up 33 percent to 34.4 billion yuan.

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