Trump’s gestures towards China, international fund inflows boost Hong Kong market turnover
Analysts expect market rally to continue until at least April when Europe undergoes a series of presidential elections
The rally in Hong Kong’s stock market and the increase in turnover for the week ending February 10 are likely to continue until the end of the first quarter due to an expected increase in international fund flows after a thawing of the relationship between the United States and China, according to analysts.
Turnover in Hong Kong’s stock market increased to a daily average of HK$82 billion last week, up 44 per cent from January’s HK$57.2 billion daily average. The figure is a 22 per cent rise from the daily average daily last year although it is still down 22 per cent from HK$105.6 billion median seen in 2015.
The benchmark Hang Seng Index rose 2 per cent last week to close on Friday at 23,574.98 points, the highest in four months.
“The reason for the stock market rally is US President Donald Trump who has made a number of friendly gestures towards China. Meanwhile, he has also announced policies that will benefit the business and banking sector. This boosted Hong Kong market sentiment and this is unlikely to change until the end of March,” said Jasper Lo, the chief strategist at King International.
Lo said an improved Sino-US relationship and the news of certain relaxations on banking regulations were positive factors raising market sentiment. In addition, Trump is going to announce details of a tax cut plan aimed at boosting the economy that will likely attract investors to come out spending.
“The friendly gestures among the two political leaders of the US and China removed market worries over a potential trade war between the two countries. The positive sentiment is likely to continue until early April when Europe will start a series of presidential elections,” Lo aid.