Gains in Chinese banks help push Hong Kong stocks further into record territory
Morgan Stanley raises earnings outlooks and price targets for top Chinese banks, with China Construction Bank leading gains with a 5.6 per cent surge
Hong Kong stocks pushed further into record territory on Friday, logging a seventh straight week of gains, with the benchmark index closing above 33,000 for the first time as banks posted strong gains and internet giant Tencent Holdings set a new high.
The Hang Seng Index rose 1.5 per cent, or 499.67 points, to end at 33,154.12, having earlier an intraday record of 33,223.58. For the week, the index advanced 2.8 per cent, extending gains to a seventh straight week.
The Hang Seng China Enterprises Index, known as the H-shares index, ended up 2.5 per cent at 13,723.96, capping the week with a 4.1 per cent gain.
Average daily turnover for the week increased to HK$184.5 billion, up 6 per cent from the previous week.
“The market’s rebound [after Thursday’s losses] is supported by a stronger renminbi,” said Louis Tse, managing director at VC Asset Management, adding however that a correction in the past two sessions “could go deeper” as short-term investors cash in before the Lunar New Year holiday. He suggested long-term investors wait and take profit later.
Earlier on Friday, the People’s Bank of China raised the yuan’s mid-point rate against the US dollar to 6.3436, the highest level in more than two years and a sixth straight day of strengthening.
Banks were the main driver of Hong Kong shares, after Morgan Stanley raised its price targets for the sector on the back of improved asset quality and higher net interest margins, thanks to China’s progress in financial deleveraging.