Firm Start Tipped For Hong Kong Stock Market

(RTTNews.com) - Ahead of the five-day break for the Lunar New Year, the Hong Kong stock market had closed higher in four straight sessions, jumping almost 1,100 points or 5 percent along the way. The Hang Seng Index settled just above the 20,110-point plateau, and now investors are looking for additional upside when the market kicks off trade on Thursday.

The global forecast for the Asian markets is mixed to higher, thanks to optimism regarding the latest monetary policy statement from the Federal Reserve. The upside may be capped, however, by hurt by lingering debt concerns from Greece. Gold shares are expected to provide support, along with steel, oil and property stocks. The European markets finished lower and the U.S. bourses moved higher, and the Asian markets are tipped to follow the latter lead.

The Hang Seng finished modestly higher on Friday following gains from the financial shares and the retailers.

For the day, the index added 167.42 points or 0.84 percent to finish at 20,110.37 after trading between 19,927.88 and 20,161.72 on volume of 65.96 billion Hong Kong dollars.

Among the gainers, HSBC climbed 3.7 percent, while Standard Chartered jumped 4.2 percent and Li Ning spiked 8.5 percent.

The lead from Wall Street is firmly positive as stocks showed a strong upward move on Wednesday, benefitting from the latest monetary policy statement from the Federal Reserve which said economic conditions are likely to warrant exceptionally low interest rates at least through late 2014.

The Fed has kept its target for the federal funds rate at zero to 0.25 percent since December of 2008. The central bank previously indicated that it planned to keep rates at near-zero levels through at least mid-2013. The Fed noted that its pledge to keep rates at exceptionally low levels reflects expectations for low rates of resource utilization and subdued inflation over the medium run.

At the same time, the central bank said that data received since its last meeting in December suggests that the economy has been expanding moderately, despite some slowing in global growth. With regard to the economic outlook, the Fed said it expects GDP to grow by 2.2 percent to 2.7 percent in 2012, reflecting a downward revision from the 2.5 to 2.9 percent growth forecast in November.

By contrast, sentiment may be capped by lingering concerns that Greece may default on its sovereign debt. Greece said it aims to complete a debt swap deal with its private creditors by week's end, but markets remained skeptical.

Also, the National Association of Realtors reported that pending home sales fell 3.5 percent to a reading of 96.6 in December from a reading of 100.1 in November. Economists had been expecting the index to drop by about 1.0 percent.

The major averages closed firmly in positive territory, near their best levels of the day. The Dow rose 83.10 points or 0.7 percent to 12,758.85, the NASDAQ jumped 31.67 points or 1.1 percent to 2,818.31 and the S&P 500 climbed 11.41 points or 0.9 percent to 1,326.06. With the gains on the day, the Dow reached an eight-month closing high, while the NASDAQ and the S&P 500 ended the session at nearly six-month closing highs.

In economic news, Hong Kong will on Thursday release December figures for imports, exports and trade balance. Imports are expected to add 7.0 percent on year after collecting 8.8 percent in November. Exports are called higher by 3.5 percent after adding 2.0 percent in the previous month. The trade balance is expected to show a deficit of 55.5 billion Hong Kong dollars following the 44.1 billion HKD shortfall a month earlier.

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