The Hong Kong stock market on Tuesday wrote a finish to the three-day winning streak in which it had climbed more than 225 points or 0.8 percent. The Hang Seng Index now rests just above the 28,180-point plateau although it may bounce higher again on Wednesday.
The global forecast for the Asian markets is upbeat after FOMC Chairman Jerome Powell's semiannual monetary policy testimony had few surprises. The European and U.S. markets were up and the Asian markets figure to follow suit.
The Hang Seng finished sharply lower on Tuesday following losses from the financials, properties, casinos and oil and insurance stocks.
For the day, the index tumbled 357.98 points or 1.25 percent to finish at 28,181.68.
Among the actives, CSPC Pharmaceuticals plummeted 3.75 percent, while China Mengniu Dairy plunged 3.55 percent, CNOOC tumbled 3.38 percent, WH Group skidded 3.33 percent, Sands China dropped 3.23 percent, Galaxy Entertainment retreated 1.78 percent, Industrial and Commercial Bank of China declined 1.61 percent, China Life shed 1.21 percent, New World Development lost 0.92 percent, Hong Kong & China Gas advanced 0.91 percent, Ping An Insurance fell 0.71 percent and China Petroleum and Chemical (Sinopec) eased 0.42 percent.
The lead from Wall Street is positive as stocks moved higher on Tuesday as the NASDAQ set a new record closing high and the S&P 500 hit its best closing level in over five months.
The Dow rose 55.53 points or 0.22 percent to 25,119.89, the NASDAQ advanced 49.40 points or 0.63 percent to 7,855.12 and the S&P 500 added 11.12 points or 0.40 percent to 2,809.55.
The strength on Wall Street came after Fed Chair Powell said the U.S. economy has grown at a solid pace this year and noted the latest data suggests economic growth in the second quarter was "considerably stronger" than in Q1.
With the strong job market, inflation close to the objective, and the risks to the outlook balanced, Powell reiterated that the Fed believes gradually raising interest rates is "the best way forward."
The Fed has raised rates twice this year to the current range of 1.75 to 2 percent and has signaled two more rate hikes before the end of the year.
In economic news, the Fed said that industrial production increased in line with estimates in June amid a rebound in auto production. A separate report from the National Association of Home Builders said homebuilder confidence held steady in July.
Crude oil futures were slightly higher on Tuesday amid reports about a likely drop in U.S. crude stockpiles last week. Crude oil futures for August ended at $68.08 a barrel, gaining 2 cents.
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