The global forecast for the Asian markets is unclear with perhaps a slight downside bias as sound economic data from the U.S. may be offset by weakness in commodities thanks to a strengthening greenback. Gold stocks may be particularly susceptible to consolidation, along with airlines, technology stocks and properties - while pharmaceuticals are likely to provide support. The European markets finished mixed and the U.S. bourses ended slightly lower - and the Asian markets are expected to fall right in between.
The Hang Seng finished with heavy losses on Wednesday, especially among the financial shares and the airlines.
For the day, the index plunged 455.84 points or 2.0 percent to finish at 22,975.35 after trading between 22,876.88 and 23,371.34 on turnover of 72.45 billion Hong Kong dollars. Among the decliners, Cathay Pacific plunged 7.2 percent, while HSBC plummeted 1.4 percent, China Construction Bank shed 2.3 percent and PetroChina declined 3.6 percent.
The lead from Wall Street is mildly negative as stocks ended largely on the downside on Wednesday, even as New York State manufacturing activity and industrial production numbers beat forecasts, while consumer price inflation remained subdued despite recent signs of life from the retail sector.
Profit taking may have contributed to the downturn by the markets as some market participants are closing the books on 2010. The pullback also came amid an increase in the value of the dollar as well as an increase in bond yields.
On the economic front, the Labor Department said its consumer price index edged up by 0.1 percent in November, just below expectations for an increase of 0.2 percent. Core consumer prices, which exclude food and energy prices, also rose 0.1 percent in November, in line with economist estimates.
The New York Federal Reserve also released a report showing that its general business conditions index climbed to a positive 10.6 in December from a negative 11.1 in November. A positive reading indicates an expansion in regional manufacturing activity.
Separately, the Federal Reserve reported that industrial production rose by 0.4 percent in November, just above forecasts for a pickup of 0.3 percent. The report also showed that capacity utilization rose to 75.2 percent in November, marking the highest level since October of 2008.
In corporate news, Yahoo! Inc. (YHOO) revealed plans to reduce about 4 percent of its total workforce or about 600 jobs in an effort to boost its revenue growth and margin expansion amid the consistently rising competition among internet search engines.
The major averages all saw choppy trading in late-session dealing, bouncing around near session lows. The Dow slid by 19.07 points or 0.2 percent to 11,457.47, the NASDAQ fell by 10.50 points or 0.4 percent to 2,617.22 and the S&P 500 declined by 6.36 points or 0.5 percent to 1,235.23.
In economic news, Hong Kong is on Thursday scheduled to release seasonally adjusted unemployment numbers for November. Forecasts call for the unemployment rate to come in at 4.1 percent, easing slightly from 4.2 percent in October.
Also, a leading indicator of the Chinese economy rose strongly in October, signaling continued robust growth in the world's second largest economy. The Conference Board leading index for China increased 0.9 percent from the previous month following a 0.6 percent increase in September and a 0.7 percent rise in August.
Also, China drew $9.7 billion in foreign direct investment in November, 38.2 percent more than in the same month of 2009, reports said on Wednesday citing the Ministry of Commerce. That followed a FDI inflow of $7.7 billion in October. In the first eleven months of the year combined, China drew $91.7 billion in FDI, up 17.7 percent from the same period of last year. For the latest updates PRESS CTR + D or visit Stock Market news Today
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