Hong Kong, Shanghai shares close out trading week on an upbeat note

Shanghai Composite adds 1.73 per cent, while Hang Seng gains 0.8 per cent

PUBLISHED : Friday, 18 March, 2016, 9:15am
UPDATED : Friday, 18 March, 2016, 6:52pm

Hong Kong and Chinese mainland stock markets closed out the trading week with solid gains on Friday, lifted by an upbeat investor tone that’s been in place since the Federal Reserve signalled a more dovish outlook on the pace of interest rate hikes, helping send the US dollar lower against its Asian counterparts.

In Shanghai, the leading stock index ended at a two-month high, after rising 5.2 per cent for the week. Friday’s action lifted the Shanghai Composite Index 1.73 per cent, or 50.32 points to 2,955.15 on Friday.

The Shenzhen Composite Index rose 3.65 per cent to 1,837.21. The Nasdaq-style ChiNext Index surged 4.34 per cent to 2,177.87.

Turnover on both Shanghai and Shenzhen markets surged to above 960 billion yuan (HK$1.15 trillion), the highest so far this year.

Hong Kong stocks also rose, with analysts expecting the uptrend to continue.

Eric Wu, a hedge fund analyst based in Shanghai, noted that investor sentiment appears to have “warmed” this week.

“It seems the authorities have allowed higher leveraged buying in the market. We also expect the Shenzhen-Hong Kong stock connect scheme to kick off shortly, based on the authorities recent statements. There are also people betting on economic data to be improved with earlier easing measures taking effect,” he said.

Official data released on Friday shows home prices in two-thirds of major Chinese cities rose in February. Shenzhen led the gainers, with prices there climbing 3.6 per cent on month and a record 57.8 per cent during the past year.

In Hong Kong, the benchmark Hang Seng Index closed higher by 0.82 per cent to 20,671.63. For the week, the index was up 2.23 per cent. The Hang Seng China Enterprises Index tacked on 1.24 per cent to 8,883.01.

Conglomerates controlled by the family of Li Ka-shing traded mixed a day after releasing annual results.

CK Hutchison added 1.77 per cent to HK$100.60 on Friday, after it posted an adjusted net profit of HK$31.2 billion for 2015, above the consensus HK$31 billion estimate in a Reuters poll of analysts.

Cheung Kong Property eased 2.4 per cent to HK$46.80, after reporting its 2015 net profit increase 0.26 per cent to HK$17.11 billion

Other notable movers included Macau casinos. Galaxy Entertainment surged by 9.61 per cent to HK$29.65, while MGM China shot up by 13.86 per cent to HK$10.68 and Wynn Macau jumped 7.5 per cent.

The People’s Bank of China on Friday morning set the yuan reference point against the US dollar at 6.4628, or 333 basis points stronger than its fixing on Thursday. The currency is allowed to trade up to 2 per cent on either side of the reference point for the day.

Offshore yuan was trading at 6.4767 per US dollar at 4:35pm, while onshore yuan was trading at 6.4743 per dollar.

Shares of Chinese wind power generators surged after the National Energy Administration issued a directive late Thursday requiring them to develop methods to increase utilisation rate, including generating heat in winter months, and stipulating local power grids to guarantee minimum utilisation hours for wind farms.

Huaneng Renewables jumped 6.88 per cent to HK$2.33 while China Longyuan Power rose 6.90 per cent to HK$5.42. Shares of Kunlun Energy, the natural gas distribution and overseas oil production unit of PetroChina, fell 2.50 per cent to HK$6.24.

Around the region, Asian markets broadly closed higher on Friday, except for Japan. Tokyo’s Nikkei 225 slid 1.25 per cent to 16,724.81 for closing.