Hong Kong stocks extend gains as Brexit fears continue easing
Hang Seng rises for third day in a row to close at 20,668.44
Hong Kong stocks gained for the third day in a row on expectation Britons will vote to remain in the European Union on Thursday.
But some analysts still warned investors were not fully prepared for any possible “Brexit”.
The Hang Seng Index edged higher by 0.77 per cent or 158.24 points to close at 20,668.44, while the Hang Seng China Enterprises Index eased 0.2 per cent ahead, or 64.89 points to 8,704.4.
Total market turnover was HK$53.91 billion, the lowest in five days.
Ivan Li, Tung Shing Securities equities analyst, said the Hong Kong market was too positive to be fully prepared for a possible Brexit.
“The sentiment is Britain will ultimately remain in the EU.
“But some polls show voting is still too close to call,” Li said.
A “Bremain” result may not actually bring much gain to local stocks, he said, but the Hang Seng Index could fall to 19,000, if the referendum turns out to favour an exit.
Insurance, banking and conglomerate stocks led gains in Hong Kong.
HSBC Holdings was up 0.91 per cent to HK$49.8 while Standard Chartered jumped 2.11 per cent to HK$62.90. Both are seen as big losers if the UK votes to leave the EU.
Kwok Sze-chi, Bright Smart Group’s marketing director, said some short sellers were closing their positions as the likelihood of the UK remaining in the EU increased.
“There is not much chance of the index rising sharply as turnover is quite slim,” Kwok said, adding that investors were adopting a ‘wait and see’ attitude ahead of the vote.
Hong Kong tycoon Li Ka-shing, in an interview with Bloomberg TV, called for Britons to vote to remain in, as a departure of the UK from EU would be “detrimental” to Britain and have a negative impact on the whole of Europe.
But Li said his business in the UK and Europe would continue regardless of the result.
Shares in CK Hutchison Holdings rose 0.66 per cent to HK$91.05, with Cheung Kong Property Holdings shares rising 0.94 per cent to HK$48.3.
Kwok said the A-share market was not as affected by such external factors, with investors still paying more attention to the quiet macro economic environment.
The Shenzhen Composite Index closed at 1.02 per cent or 19.41 points lower at 1,889.71 while the Nasdaq style ChiNext ended down 1.3 per cent at 2,092.
Brokerage houses, banking and paper manufacturers led the gains, but they were offset by a dip in liquor, software and metal sectors.
Separately, Janet Yellen, chairwoman of the US Federal Reserve, will start her two-day semi-annual congressional testimony before the Senate Banking Committee on Tuesday night.
Market watchers expect her to give a clue on any possible interest rate rises, and offer a view on Brexit.
Additional reporting by Vivian Lin.