Hong Kong stocks gain after Dow Jones passes 20,000
Hang Seng jumps 1.41 per cent to 23,374.17, the highest close in three months
Hong Kong stocks rose for a fourth day after the Dow Jones Industrial Average closed above 20,000 points for the first time, reflecting strong growth sentiment in the US.
Mainland shares also closed higher on Thursday after a five-day winning streak with investors expecting a strong start to the Year of Rooster.
The Hang Seng Index jumped 1.41 per cent or 325.05 points to 23,374.17, the highest close in three months. The Hang Seng China Enterprises index closed 1.15 per cent or 112.04 points up to 9,854.36.
The benchmark’s rise was led by snack maker Want Want China’s 3.84 per cent gain to HK$5.41. The bullish sentiment also helped investors overlook a profit warning from China Unicom, which went up 3.72 per cent to HK$9.19.
The Chinese telecom operator said late on Wednesday it expected a 94 per cent decline in last year’s net profit.
However, Macau casino operator Sands China tumbled 0.71 per cent to HK$35.10 after it reported a 15.9 per cent year-on-year drop in 2016 net income.
Ben Kwong, executive director at KGI Asia, said investors were looking for excuses to buy with equity markets showing buoyant signs globally.
“Investors’ risk appetite remains very good,” Kwong said. “The rally will be sustained for a while until there is big change in major indicators, such as the US dollar rate, US bond yield rate and renminbi rate.”
The Shanghai Composite Index rose 0.31 per cent or 9.61 points to 3,159.17 while the blue-chip CSI 300 gained 0.36 per cent or 12.06 points to 3,387.96.
The Shenzhen Component Index edged up 0.74 per cent or 74.09 points to 10,052.05 and the Nasdaq-style ChiNext climbed 0.83 per cent or 15.53 points to 1,886.23.
Kwong said the often firm stock price on the first days of a Lunar New Year also prompted many to buy in.
“But bear in mind we already have good gains ahead of the holiday,” he added. “We may see a strong opening in the new year, but afterwards profit-taking pressure will limit the gains.”
Thursday is the last full-day of trading in the Year of Monkey. Hong Kong’s market will be closed from Friday afternoon and re-open next Wednesday.
Mainland markets will be closed from Friday to next Thursday.
In the US, the blue-chip Dow Jones index ended 0.78 per cent or 155.80 points up to 20,068.51 on Wednesday
The S&P 500 was up 0.80 per cent to a record high of 2,298.37. The Nasdaq Composite also hit a record for a second day after rising 0.99 per cent to 5,656.34.
Although investors had been cautious about US President Donald Trump’s anti-trade rhetoric, a series of pro-growth initiatives he took this week have raised confidence in the domestic economy.
Trump has pushed forward with infrastructure projects, urged manufacturers to make products in the US and nominated business friendly figures to his cabinet. He has also promised to streamline corporate regulations and cut taxes.
Positive fourth-quarter company earnings also boosted market sentiment.
Nearly 70 per cent of the 104 S&P 500 companies that had reported results by Wednesday morning beat expectations, according to Reuters.
Other Asian markets showed strong starts after the Dow passed its 20,000 milestone. Tokyo’s Nikkei 225 jumped 1.81 per cent to 19,402.39, and South Korea’s Kospi ended up gaining 0.81 per cent to 2,083.59. Australia is closed for a public holiday.