Hong Kong stocks rebound as market remains positive on Xi-Trump meeting, despite Syria missile attack
Sentiment remains positive as investors expect no bad news to come out of presidential summit
Hong Kong stocks closed flat on Friday, after falling earlier in the day on panic selling after news broke of the US missile attack on a Syrian airbase.
Brokers said the rebound was due to the generally positive reaction to the ongoing meeting between the Chinese and US presidents, Xi Jinping and Donald Trump, believing market sentiment will continue to be positive next week.
The benchmark Hang Seng Index closed 6 points lower, or 0.03 per cent, to end the week at 24,267, recovering from a 1.2 per cent decline earlier, as the market reacted to the US military action.
The index has risen 0.65 per cent this week, reversing a 1 per cent decline last week. Market turnover on Friday stood at HK$88.8 billion.
The attack still sent international oil price higher, leading major oil stocks to rise in tandem.
CNOOC ended up 1.5 per cent to close at HK$9.54, PetroChina rose 2.3 per cent to close at HK$5.78, while Sinpec was up 1.4 per cent to close at HK$6.55.
China Unicom, whose parent is involved in a mixed-ownership reform, rose 5 per cent on Friday, the best performer of all blue chips, to close at HK$10.96. The Hang Seng China Enterprises Index, or H-share Index, lost 0.03 per cent to stand at 10,273.80.
Shanghai and Shenzhen equity markets also shrugged off any geopolitical risks to post modest gains as marketeers focused instead on the summit meeting between the two presidents in Florida.
The Shanghai Composite Index rose 0.18 per cent to close at 3,287, meaning a total 2 per cent rise this week – a reverse from the weekly decline of 1.44 per cent the previous week.
Shenzhen’s Component Index rose 0.13 per cent to 10,669.48, a 2.31 per cent rise for the week, against a decline of 2.05 per cent the previous week.
“The US missile attack on Syria led to market overreaction on Friday morning but stocks soon bounced back,” said Louis Tse Ming-kwong, managing director of VC Asset Management.
“Overall, the market remains positive on the outcome of the meeting between Xi and Trump. We do not expect bad news to come out of it, and that’s what supported the rebound,” said Tse, predicting the market would remain positive next week, and may even test the 24,500 level.
Ben Kwong Man-bun, a director at KGI Asia, said the attack created some panic selling but had failed to hurt sentiment, reiterating he too was positive about the meeting between Xi and Trump.
However, with the Easter holiday approaching, he expects a quiet week to follow.
“Investors tend not to invest ahead of a long holiday. In addition, the French presidential election is going on which has added uncertainty to the market. This has led many investors to adopt a wait-and-see attitude,” Kwong said.
Gold related stocks rose, to catch up with a pick up in gold prices. Zijin Mining Group gained 2 per cent to HK$3.04 and Zhaojin Mining Industry gained 1.7 per cent to HK$7.06.
Additional reporting by Jennifer Li