Shenzhen market indices rise on technology stocks ahead of Xi speech
Shenzhen stock markets rose on Tuesday, in contrast to Hong Kong and Shanghai, as technology stocks soared ahead of a keynote speech by President Xi Jinping.
The Shenzhen Composite Index closed the day up 1.12 per cent at 2,264.72, while the ChiNext Index finished 1.34 per cent higher, at 2,745.70.
Hong Kong’s Hang Seng Index was on track to match Shenzhen before a last minute plunge saw it finish down 0.17 per cent at 21,274.37.
Phillip Securities director Louis Wong said the surge in technology stocks in Shenzhen and Shanghai had been due to anticipation of Xi’s opening speech at the World Internet Conference in Wuzhen, Zhejiang, on Wednesday.
“It’s part of the reason behind the strength of internet stocks and internet companies today,” he said.
Technology components company GoerTek finished up more than 5 per cent in Shenzhen to end the day at 34.43 yuan, while multinational telecommunications company ZTE closed at 18.70 yuan, up 3.3 per cent.
While technology and telecommunications stocks also surged in Shanghai, they could not push the benchmark higher. It closed down 0.28 per cent at 3,510.90.
The drop was mostly due to the financial sector, in particular blue-chip stocks, which were weak after leading a strong push on Monday.
“Banking stocks have been under pressure recently because they were worried about the deterioration of asset quality,” Wong said.
Wong said that with the United States interest rate decision due on Wednesday there was still a large degree of instability in the Hong Kong stock market.
“They are starting to get a bit nervous and they don’t want to hold positions overnight,” he said. “I think this will also happen tomorrow before the decision.”
The yuan traded around 0.08 per cent weaker onshore at 6.4607 per US dollar after the People’s Bank of China set the reference rate 0.1 per cent lower at 6.4559, a new four-and-a-half-year low.