US data breathes life into stocks
Hang Seng Index gains 6.4pc as sentiment improves after surprise rise in home sales
Hong Kong stocks rose the most in two months yesterday after signs of life in the ailing United States economy provided an opportunity for investors to buy back beaten down shares.
The troubled US housing market unexpectedly picked up last month, with a report on Monday showing sales of existing homes rose for the first time since July last year. And JP Morgan Chase sweetened its offer price for Bear Stearns, signalling that some order had been restored to financial markets.
The Hang Seng Index opened 3.48 per cent higher before investors sent it soaring 1,356.3 points or 6.43 per cent to close at 22,464.52. All but two members of the 43 blue-chip benchmark rose, joining an equity rally across Asia.
'It shows how hungry everybody is,' said Francis Lun Sheung-nim, a general manager at Fulbright Securities. 'They've been starving for good news for so long so that when the market rebounds, all hell breaks lose.'
With the Hong Kong market resuming trade after the Easter break, the Hang Seng's gains easily outpaced the regional rally.
'Don't forget that Hong Kong declined much more than everyone else last week so it was playing catch-up,' Mr Lun said.
Elsewhere in the region, Japan climbed 2.12 per cent, India gained 6.07 per cent, Indonesia rose 3.43 per cent, Malaysia rallied 2.41 per cent and South Korea added 1.19 per cent.
Across the border, the Shanghai Composite Index added 3.431 points or 0.09 per cent to close at 3,629.619. The benchmark had fallen as much as 2.89 per cent before finding support near the 3,500-point level and finishing the day little changed after a technical rebound.
Meanwhile, in the local market yesterday, stocks were up in all corners of the market as investors scrambled to join the rally.
'The recent plunge was mainly from the subprime crisis in the US so if the subprime crisis pressures are going to ease, then that will also have a positive effect on the Hong Kong market,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities.
If the Hang Seng Index could hold the 22,000-point level, it could trade as high as 24,000 later this week, Mr Tang said.
Cosco Pacific rose as concerns eased over a slowdown in global economic activity. Asia's third-largest container-terminal operator jumped 10.18 per cent to HK$13.64 to pare losses this year to 34.42 per cent.
Esprit Holdings, a global retailer, gained 7.74 per cent to HK$92.55 cutting its decline so far this year to 20.22 per cent.
The financial sector also surged before results announcements from leading banks, including Industrial and Commercial Bank of China and Bank of China. The two mainland lenders climbed 8.56 per cent and 7.28 per cent, respectively.
But even after yesterday's market payday, main-board turnover barely topped HK$100 billion as some investors stayed on the sidelines.
'The signal was not so strong for a turnaround,' said Michael Wong, a research director at Hantec Investment. 'The sentiment hasn't changed to have an upturn, and it is still wait-and-see for the next season's performance.'
