More Pressure For Hong Kong Stocks

(RTTNews) - The Hong Kong stock market saw its losing streak hit four sessions, shedding more than 1,200 points or 9 percent along the way. The Hang Seng Index dipped below the 12,000-point plateau intraday on Thursday before recovering - but investors are expecting to revisit those lower levels again when the market kicks off trade on Friday.

The global forecast for the Asian markets is loaded with pessimism once again as data and events continue to point to a lengthy and deep worldwide recession. Weaker than expected unemployment data out of the United States further fueled those fears, as does the uncertainty surrounding the survival of the three largest producers in the American automobile industry. The European markets were down sharply, as was Wall Street - and the Asian markets are tipped to follow that lead.

The Hang Seng finished sharply lower again on Thursday, as the financial stocks fell under heavy selling pressure throughout the session. The properties also posted significant losses, as did the commodities.

For the day, the index plummeted 517.24 points or 4.04 percent to close at the daily high of 12,298 following a lower opening. The market sank as low as 11,976 in thin trade worth 44.62 billion Hong Kong dollars.

The financials led the market to the downside as HSBC was down 4.55 percent, while Hong Kong Exchanges & Clearing slumped 6.19 percent, China Life lost 4.62 percent, ICBC slipped 6.02 percent, China Construction Bank slumped 4.27 percent, Bank of Communications fell 3.04 percent, Bank of China was off 2.42 percent, Hang Seng Bank was down 1.2 percent, Bank of East Asia was down 4.79 percent and BOC Hong Kong was down 1.91 percent.

Among other decliners, China Unicom was down 5.18 percent, while China Telecom was down 5.62 percent, Sino Land plunged 8.01 percent, Henderson Land lost 2.94 percent, Sun Hung Kai was down 4.97 percent, Cheung Kong was up 0.46 percent, CNOOC was down 6.32 percent, Sinopec was down 3.63 percent, PetroChina fell 4.25 percent, Chalco fell 5.94 percent, Jiangxi Copper slipped 5.5 percent, China Shenhua was down 7.72 percent, Angang Steel tumbled 15.29 percent and China Mobile lost 1.5 percent.

The market inherits yet another horrific lead from Wall Street as ended Thursday's trading sharply lower following a late day sell-off after showing substantial volatility throughout the trading session. With traders reacting to disappointing economic data, the major averages all ended the session at multi-year closing lows.

Stocks showed a substantial decline in early trading following the release of a report from the Labor Department showing that first-time claims for unemployment benefits unexpectedly jumped to a sixteen-year high last week. The report showed that jobless claims for the week ended November 15th rose to 542,000 from the previous week's revised figure of 515,000. With the increase, jobless claims rose to their highest level since spiking to 564,000 in July of 1992.

Selling pressure waned not long after the open, however, and the markets moved back to the upside as traders went bargain hunting. Contributing to the recovery was a report of a compromise on a bailout of the three big U.S. automakers. But stocks turned lower after the Democratic leaders said that there would be no vote on a bailout for the automakers this week. Some reports have suggested that the bailout could be delayed until the new presidential administration takes office in January.

Stocks subsequently accelerated to the downside in the latter part of the trading day, with the major averages continually taking out their lows for the session. The major averages all closed sharply lower, with the Dow and the Nasdaq ending the day at their worst closing level since March of 2003 while the S&P 500 ended the session at its lowest closing level since April of 1997.

The Dow finished the session down 444.99 points or 5.6 percent at 7,552.29, while the Nasdaq closed down 70.30 points or 5.1 percent at 1,316.12 and the S&P 500 closed down 54.14 points or 6.7 percent at 752.44.

In economic news, Hong Kong's consumer price index rose 1.8 percent year-on-year in October, but at a slower pace than 3 percent rise recorded in September. Analysts expected consumer prices to rise 1.9 percent. Among the components, price for public house renting dropped 93.3 percent due to the government's payments of three months public housing rentals. Price of utilities slipped 32.3 percent helped by the government's implementation of electricity charge subsidy and rates concessions.

Moreover, prices of alcoholic beverages and tobacco fell 1 percent, clothing and footwear 0.6 percent, durable goods 0.8 percent, educational services 5.4 percent and telephone and other communication services 3.4 percent in October. On the other hand, prices of food, excluding meals away from home, rose 14.9 percent in the month, recording the fastest rise among the sub groups.

Meanwhile, the underlying inflation rate dropped to 5.9 percent in October from the 6.1 percent recorded in September. For the first 10 months of the year, consumer prices rose 4.6 percent compared to the same period in the previous year. In corporate news, China Growth Development, Inc saw third quarter net profits climb 23 percent on year, the company said on Thursday, standing at $4.42 million. Operating expenses decreased approximately 8 percent on year to $2.04 million, while net income improved approximately 45 percent year-over-year to $1.38 million. Net income for the first nine months of 2008 was $2.6 million, compared with $2.9 million for the first nine months of 2007.

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