Hong Kong stocks rise to three-week high as risk appetite improves and trade war concerns fade

Hong Kong stocks rose for a sixth day, sending the benchmark gauge to its highest level in three weeks, as fears of a global trade war eased and investors’ risk appetite returned with US technology stocks rising to records.

The Hang Seng Index added 0.8 per cent, or 253.53 points, to 31,512.63 at the close on Thursday, capping a 4.8 per cent gain in six days. The Hang Seng China Enterprise Index, or the H-share gauge, advanced 1 per cent. The mainland’s benchmark Shanghai Composite Index fell on Thursday for the first time this week.

The six-day winning streak came amid a recovery in the global risk appetite after the Nasdaq Composite Index rose to a record on Wednesday, and as trade frictions between China and the US seem to have settled temporarily following rounds of talks. The Hang Seng Index was now within a whisper of breaking out of a 2,000-point range that has held back the gauge over the past four months. For any breakout, the Hang Seng Index will need to rise above the top end of the range that stood at 31,601.45, which represents a 0.3 per cent gain from Wednesday’s close.

“The risk-on mode is back among global investors and Hong Kong’s market is apparently benefiting from a recovery in the good sentiment towards equities,” said Wei Wei, a trader at Huaxi Securities in Shanghai. “The trade spat has seemingly been resolved for the time being and the probability of a trade war looks pretty low in the short term.”

Geely Automobile Holdings rallied 3.4 per cent to HK$24.05, becoming the biggest gainer on the Hang Seng Index after the carmaker posted a 61 per cent increase in vehicle sales in May.

Hong Kong Exchanges and Clearing, the operator of the city’s bourse, added 1.9 per cent to HK$263.40 after the Hong Kong government said it boosted its shareholding in the company to 6 per cent.