Market Commentary and Intraday News

Rally May Stall For Hong Kong Stock Market

258 days ago

(RTTNews) - Ahead of the long weekend for the National Day holiday, the Hong Kong stock market had finished higher in consecutive trading days - rising more than 310 points or 1.5 percent along the way. The Hang Seng Index closed just above the 20,840-point plateau, and now analysts are predicting a soft start for the market at the opening of trade on Wednesday.

The global forecast for the Asian markets is mixed to lower following reports that a bailout request from Spain may not be forthcoming after all. Spanish officials were said to be ready to ask for a bailout, although Spanish Prime Minister Mariano Rajoy later denied that report, fomenting additional uncertainty. Traders also may be reluctant to make any significant moves ahead of Friday's monthly U.S. jobs report. The European markets were lower and the U.S. bourses were mixed but little changed - and the Asian markets figure to split the difference.

The Hang Seng finished modestly higher on Friday as gains from the financial shares and resource stocks were capped by weakness from the property sector.

For the day, the index added 78.09 points or 0.38 percent to finish at 20,840.38 after trading between 20,725.52 and 20,889.90 on volume of 50.67 billion Hong Kong dollars.

Among the actives, Wharf Holdings jumped 1.80 percent, while Hang Seng Bank collected 0.76 percent, Bank of China gained 0.68 percent, China Unicom added 0.63 percent, China Coal Energy spiked 2.02 percent, Aluminum Corporation of China climbed 1.58 percent, Cheung Kong shed 0.61 percent, Henderson Land lost 1.50 percent and New World Development fell 0.66 percent.

The lead from Wall Street offers little clarity as stocks turned in a lackluster performance on Tuesday as traders focused on the latest headlines out of Europe. The major averages eventually ended the session mixed for the second straight day.

The choppy trading came as traders digested mixed news regarding the possibility of a bailout for Spain in the near term. Early strength was generated by a report from Reuters indicating that the debt-plagued county is ready to request a bailout as early as next weekend.

Reuters said that Spanish officials are now ready to ask for a bailout - but Spanish Prime Minister Mariano Rajoy later denied the report, saying that a bailout request from Spain is not "imminent." The remarks by Rajoy pulled stocks down off their early highs, as they led to renewed uncertainty about the timing of a Spanish bailout.

Traders also seemed reluctant to make any significant moves ahead of Friday's monthly jobs report, which could have a significant impact on the outlook for the economy.

Among individual stocks, shares of Core Laboratories (CLB) moved sharply lower after the oil services provider warned of weaker than previously forecast third quarter results. Wausau Paper (WPP) also posted a steep loss after lowering its full-year earning guidance. On the other hand, shares of Stage Stores (SSI) surged after reporting that sales spiked 13.7 percent in September.

The major U.S. averages were mixed but little changed on Tuesday as the Dow edged down 32.75 points or 0.2 percent to finish at 13,482.36, while the NASDAQ inched up 6.51 points or 0.2 percent to end at 3,120.04 and the S&P 500 crept up 1.26 points or 0.1 percent to close at 1,445.75.

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