China Stock Turmoil 2015

Hong Kong stocks finish higher on oil’s resurgence but China shares fall in volatile trade ahead of Christmas

Hang Seng benchmark rises more than 1 per cent in afternoon trade

PUBLISHED : Wednesday, 23 December, 2015, 9:29am
UPDATED : Thursday, 24 December, 2015, 12:43am

Hong Kong stocks finished at a three-week peak amid positive news for energy portfolios on Wednesday, but Chinese shares were not so lucky, as opening gains were erased after a late fall.

Meanwhile Guotai Junan International Holdings, one of China’s top three brokerages, saw its stocks jump following the company chairman’s reappearance after “assisting” mainland authorities in their enquiries for five weeks.

The Hang Seng Index closed the day up 0.96 per cent, finishing at 22,040.59 points, after a stable day of trading and an early morning jump left markets at a three-week high just ahead of Christmas.

The H-shares index ended even higher, closing at 9,882.95 points after a steady rise of 1.56 per cent.

The Hong Kong market will be open for trading on Thursday but will close for Christmas Day. Chinese equities in Shanghai and Shenzhen will be open Thursday and Friday. All three markets will be shut on January 1 for New Year.

“I think the market sentiment has improved since last week and, because the market has broken out of the level of 22,000, I expect it to go further – towards 22,200 as the new normal,” Philip Securities director Louis Wong said.

Wong said the steady rise in Hong Kong stocks had been due to the improved outlook for financial stocks and the rebound in oil and gas prices.

Guotai Junan International chairman and chief executive Yim Fung resumed his duties on Wednesday, causing his company’s shares to jump 8.05 per cent to close at HK$2.82.

The brokerage said in a filing to the Hong Kong stock exchange that neither its chairman nor the company had been the subject of an investigation, even as the conditions of his mysterious disappearance last month were left unexplained.

“Dr Yim, in his personal capacity, had been assisting in certain investigations carried out by mainland (China) authorities during the period he was unable to be reached,” the company said.

In Shanghai, after a promising midday close, stocks dropped to finish slightly down at the end of Wednesday’s session, easing 0.43 per cent to 3,636.089 points.

The CSI 300 index saw blue-chip stocks also a little weaker, down 0.27 per cent to 3,866.381 points.

Wong said the weakness in China’s stock market, which experienced some volatile activity, had been due to a poorly performing Chinext index, which plunged 1.97 per cent as the financial sector lost about 5 per cent.

“It dampens market sentiment across the board,” he said. “It has gone down a bit over the past few days ... [but] I think it’s just a short-term readjustment.”

The Shenzhen composite index fell 1.2 per cent to 2,351.065 points after a late afternoon surge in prices could not be sustained.

In Asian trading on Wednesday, West Texas intermediate crude was up 28 US cents, or 0.8 per cent, to US$36.42 a barrel, on the New York Mercantile Exchange.

In overnight trading, the US crude oil benchmark advanced to settle above its European energy benchmark counterpart – Brent oil traded on London’s ICE market – for the first time in more than five years, as a ban of US oil exports was lifted, reversing what had been a block on shipments of US oil to international markets lasting more than four decades.

An unwinding of bets of further declines in oil prices ahead of the end of the year was also cited as a reason for the uptick in the US oil benchmark.

Meanwhile, the yuan’s mid-point was set 15 basis points lower to 6.4731 to the dollar, strengthening the currency for the second day in a row.