Hong Kong stocks track higher, led by rate-sensitive property sector
Hang Seng Index climbs 0.36 per cent to 23,681; Hang Seng China Enterprises Index adds 0.58 per cent to 10,229 at close of trading
Hong Kong and mainland stocks ended higher on Tuesday as investors took heart from Beijing’s pledge to support innovation and economic restructuring at its annual plenary meeting.
The Hang Seng Index rose 0.36 per cent to 23,681 and the Hang Seng China Enterprises Index added 0.58 per cent to 10,229 at close of trading.
The rate-sensitive property sector bounced back from yesterday’s declines, as the impact of a near-certain US interest rate rise was absorbed by the market.
Federal Reserve Chair Janet Yellen hinted strongly last Friday that the central bank will raise interest rates at its next meeting on March 14-15.
China Resources Land led the gains, rising 2.7 per cent to HK$21.0, while Hong Kong developer Hang Lung Properties edged up 1.86 per cent to HK$19.8.
Food manufacturer Want Want China Holdings surged 2.8 per cent to HK$5.14.
“People will still hold onto their positions and will keep pouring money into the equity markets,” said Alex Wong Kwok-ying, director at Ample Finance Group. “We will likely see the Hang Seng Index surpass the 24,000 threshold by the end of the week.
“There is no way a market correction would be triggered now with people being so optimistic.”
Chinese premier Li Keqiang unveiled a growth target of 6.5 per cent for 2017, down from last year’s 6.5 to 7 per cent, in what has been interpreted as a cautious move designed to reduce financial risks as the country faces mounting government debt.
Speaking at the opening of China’s annual parliamentary meeting on Sunday, Li also said the government would support China’s innovative industries, sending tech shares on a rally this week.
Known as the ‘two sessions’, the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) are meeting for about two weeks in the country’s biggest annual political event.
The Shanghai Composite Index reversed the morning’s losses and ended up 0.26 per cent at 3,242, while the CSI 300, which tracks large companies listed in Shanghai and Shenzhen, rose 0.22 per cent to 3,454.
The Shenzhen Component Index closed 0.28 per cent higher at 10,552, while the tech-heavy ChiNext climbed 0.77 per cent to 1,978.
White spirit companies were among the biggest winners on mainland bourses.
Kweichow Moutai, China’s best known white spirit brand, hit a one-year high of 366.99 yuan, up 2.24 per cent. Wuliangye Yibin, another liquor producer, rose 2.71 per cent to 41.65 yuan.
Overnight in the US, equities fell on Monday as investors stayed cautious over the probability of a Fed interest rate rise next week.
The Dow Jones Industrial Average shed 0.24 per cent, or 51.37 points, to close at 20,954, while the S&P 500 declined 0.33 per cent to close at 2,375. The Nasdaq dropped 0.37 per cent, or 21.58 points, to close at 5,849.17.
Financials and materials companies were largely leading the losses in US stock markets.
Asian markets traded mixed as geopolitical concerns continued to weigh on sentiment.
The Nikkei 225 continued its losing streak, closing down 0.18 per cent to 19,344, while the Kospi in South Korea rose 0.6 per cent to 2,094. Australia’s S&P/AXS 200 gained 0.26 per cent to 5,761.
The row between Beijing and Seoul over the planned roll-out of Thaad, a US missile defence system being deployed in South Korea, has hurt the share prices of South Korean retailers and airlines. Tensions in the region notched higher on Monday after four ballistic missiles fired by North Korea landed in waters off Japan’s northwest coast.