CHINA MARKETS
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Hong Kong Stock Exchange

China stocks finish firm on central bank easing

Oil and gold stocks jump

PUBLISHED : Thursday, 04 February, 2016, 9:25am
UPDATED : Thursday, 04 February, 2016, 4:35pm

Hong Kong and Shanghai stocks advanced to a higher close on Thursday, bouncing back from previous declines, after China’s central bank pumped more cash into money markets while oil and gold prices jumped overnight on the back of a weaker US dollar.

The Hang Seng Index closed 1.01 per cent or 191.50 points higher at 19,183.09, while the H-share index rose 1.48 per cent or 116.09 points to 7,974.40.

The Shanghai Composite index ended 1.52 per cent or 41.77 points up at 2,781.02 while the CSI 300 index for large cap stocks in Shanghai and Shenzhen rose 1.22 per cent or 36.12 points to 2,984.76.

The Shenzhen Composite index gained 1.95 per cent or 33.87 points to 1,771.07 while the Nasdaq-style ChiNext index increased by 1.73 per cent or 36.12 points to 2,126.64.

The gains came after the People’s Bank of China added 150 billion yuan into banks through reverse repos in its open market operation on Thursday, following similar moves recently to ease a seasonal cash crunch ahead of the Lunar New Year holiday.

Oil and gold stocks were among the best performers in both Hong Kong and Shanghai, after oil and gold futures climbed overnight after the US dollar dropped sharply against major currencies.

“With oil prices rallying so aggressively and the US dollar under such strong pressure, it could tell a lot about the psychology of this market if we do see money managers really coming back into stocks on volume,” said Chris Weston, an analyst for IG Group. “It could provide a real sense that people don’t want to get left behind.”

Futures for March delivery of West Texas intermediate crude soared 8 per cent to finish at US$32.28 a barrel on the New York Mercantile Exchange, and March Brent crude gained 7.1 per cent to settle at US$35.04 a barrel on the ICE Futures exchange in London.

In Asian trade on Thursday, March WTI crude rose further, up 0.6 per cent to US$32.47 a barrel. Brent crude traded 1.2 per cent stronger at US$35.47 a barrel.

Gold futures for April delivery also settled 1.3 per cent higher Wednesday night at US$1,141.30 an ounce, the highest close in over three months.

By the lunch break, PetroChina had surged 5.5 per cent to HK$4.62 in Hong Kong and gained 0.8 per cent to 7.28 yuan in Shanghai. Sinopec saw its Hong Kong-listed stock up 5.5 per cent to HK$4.41, while its Shanghai-traded shares rose 0.9 per cent to 4.31 yuan. Cnooc gained 5.8 per cent to HK$7.67 in Hong Kong.

Among gold miners, Zijin Mining’s H-shares soared 10.5 per cent to HK$1.89, and its A shares jumped 3.2 per cent to 2.94 yuan. Shanghai-traded Zhongjin Gold climbed 2.7 per cent to 8.76 yuan.

US stocks posted solid gains on Wednesday as oil prices boosted the energy sector. The Dow Jones Industrial Average ended up 1.1 per cent at 16,336.66. The S&P 500 rose 0.5 per cent to 1,912.53. The Nasdaq Composite trimmed earlier losses to finish 0.3 per cent lower at 4,504.24.

Hong Kong stocks listed in the US as American Depository Receipts (ADRs) closed mostly higher than their Hong Kong counterparts after conversion into the local currency. HSBC’s ADR closed at HK$51.907, up 0.7 per cent from its Hong Kong close, Sinopec jumped 3.7 per cent to HK$4.342, and Lenovo advanced 1.1 per cent to HK$6.685.

With additional reporting by Jessie Lau

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