(RTTNews) - The Hong Kong stock market ended a two-day losing streak on Wednesday, after it had given up more than 500 points or 2.3 percent in the process. The Hang Seng moved back above the 21,600-point plateau, but now investors are leery about the market’s ability to remain above that level at the opening of trade on Thursday.

The global forecast for the Asian markets is mixed with a touch of upside, as support from the commodities on rising prices could be offset by selling among the financial and technology sectors. The European markets were sharply higher, while the U.S. bourses ended little changed - and the Asian markets are forecast to post modest gains.

The Hang Seng finished sharply higher on Wednesday, supported by gains among the financials and automobile producers.

For the day, the index jumped 374.71 points or 1.76 percent to finish at 21,614.77 after trading between 21,360.66 and 21,699.84 on turnover of 60.06 billion Hong Kong dollars.

Among the gainers, HSBC Holdings added 0.18 percent, while Denway Motors surged 7.18 percent, Great Wall Motor gained 2.54 percent, Dongfeng Motor Group spiked 12.49 percent, Sinotruk (Hong Kong) was up 1.61 percent, China Eastern Airlines added 1.44 percent and Cathay Pacific Airways gained 0.97 percent.

Finishing lower, Air China eased 0.23 percent and China Southern Airlines shed 1.32 percent.

Wall Street provides little guidance as stocks closed mixed for a second straight session on Wednesday, giving up earlier gains following news that the Federal Reserve left interest rates near record lows amid continued economic concerns. The major averages finished on opposite sides of the unchanged mark, extending their lackluster performance.

The choppy trading came after the Fed left its target for the federal funds rate unchanged in a range from zero to a quarter percent and reiterated its assessment that “exceptionally” low rates will continue for an “extended period.”

Heading into the announcement, the Fed was expected to leave rates unchanged, though there had been some expectation that the central bank would start to pave the way for an eventual rate hike down the road.

The equity markets saw considerable upside this morning as traders bought into the market despite a pair of rather lukewarm economic reports.

The Institute for Supply Management said that activity in the service sector grew for the second consecutive month in October, but the pace of growth unexpectedly slowed compared to the previous month. The index of activity in the service sector edged down to 50.6 in October from 50.9 in September, with a reading above 50 indicating growth in the sector. The decrease by the index came as a surprise to economists, who had expected the index to rise to 51.5.

Separately, Automatic Data Processing, Inc. reported that private sector employment continued to decrease in the month of October, although the pace of job losses slowed for the seventh consecutive month. Non-farm private employment fell by 203,000 jobs in October following a revised decrease of 227,000 jobs in September. Economists had expected a loss of 198,000 jobs compared to the decrease of 254,000 jobs originally reported for the previous month.

The major averages all saw notable downside in late day trading, pushing the tech-heavy NASDAQ into negative territory. The NASDAQ closed down by 1.80 points or 0.1 percent at 2,055.52, while the Dow rose by 30.23 points or 0.3 percent to 9,802.14 and the S&P 500 gained 1.09 points or 0.1 percent to close at 1,046.50.

In economic news, Hong Kong economic activity increased in October, signaling an improvement in overall business conditions, HSBC and Markit Economics said on Wednesday. The HSBC Purchasing Managers Index or PMI rose to 54.6 in October from 51.8 in September. This was the highest reading in twenty-two months. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction

Also, the growth in China’s services sector activity slowed in October, according to the same survey. The seasonally adjusted HSBC Business Activity Index fell to a four-month low of 56.5 in October.

The composite output index, measuring private sector activity and includes both services and manufacturing activity, stood at 56.9, declining for the second consecutive month, mainly due to the slower growth in services.

In corporate news, Digital China Holdings said on Wednesday that its non-wholly owned subsidiary Digital China Software Ltd. and King Tech Service HK Ltd. will acquire 23.65 percent and 6.96 percent equity interest respectively in the Japan-listed IT company SJI within this year. The consideration for the transaction is JPY 2,805 million or about HK $242 million.

Both companies will acquire SJI share options which will allow Digital China Software and King Tech to raise their equity interests in SJI to 30.81 percent and 10.07 percent respectively from 16 June 2010 to 25 December 2011.

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Posted in Categories: Releases, Stocks.

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