Update | Hang Seng Index closes above 28,000 for first time since May 2015 as Shimao, Sunac surge

Hong Kong’s Hang Seng Index closed above the 28,000 level for the first time since May 2015 as fears over North Korea’s missile launch eased and China’s yuan rose to a 14-month high.

The Hang Seng Index gained 1.2 per cent, or 329.60 points, to 28,094.61 at the close on Wednesday. The Hang Seng China Enterprises Index, the H-share gauge, added 0.7 per cent. Trading volumes on the city’s exchange were 10 per cent below the 30-day average, according to data compiled by Bloomberg. Mainland China’s equity benchmark slipped as insurance companies fell.

Hong Kong equities resumed their bull run, recouping Tuesday’s losses sparked by North Korea’s firing of a missile over Japan, as companies including Shimao Property Holdings posted higher first-half profits. US stocks rebounded overnight and the yuan strengthened.

The Hang Seng Index has advanced 28 per cent this year, the best performer among Asia’s major markets, as lower valuations and stabilisation in China’s economic growth lure fund inflows.

“Sentiment is recovering after the US markets closed higher on Tuesday,” said Stanley Chan, director of research at Emperor Securities. “Confidence is also building on strong earnings results, and for China’s property sector in third- and fourth-tier cities.”

The Hang Seng Index’s real-estate gauge rose 1 per cent. Shimao Property jumped 16 per cent to HK$16.26, its highest level since June 2015, after reporting net profit rose 28 per cent from a year earlier in the first half, excluding extraordinary gains last year. The developer also declared an interim dividend of HK$0.40, compared to a special interim dividend of HK$0.32 a year ago. Credit Suisse and JPMorgan raised their target prices for the Shanghai-based property developer to HK$17 and HK$18, respectively.