A decline in Hong Kong stocks on Friday reminded market participants that a potential recovery from the slump in share prices will not happen in a straight line and clearly shows that the market remains very headline-driven.
On Friday it was Standard Poor’s downgrade of Spain’s credit rating to AA-, or the same level as China, and the fact that China seems unable to bring down its inflation rate that rattled the markets. China’s CPI inflation data was in line with expectations, but many investors used both of these issues as an excuse to take profits after the Hang Seng Index had gained 15.4% during the previous six sessions....
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