Hang Seng Index hits six-year high on economic data and property hopes
Benchmark climbs 2.3pc to six-year high after bright services data and prospect of eased policy on mainland property loans hearten investors
The Hang Seng Index rallied yesterday to its highest point since 2008, climbing 2.32 per cent in intraday trading and breaking the 25,000-point mark on positive economic data and hints that the central government could further promote lending to the property sector.
The index hit a 52-week top of 25,325.16, its loftiest since May 2008, as major companies such as China Mobile and Industrial and Commercial Bank of China vaulted higher on positive news. The index closed 568.93 points or 2.3 per cent up at 25,317.95.
"[Hong Kong shares] got a boost from the A-shares market, which has risen 1 per cent each day for three days in a row," said Louis Wong, a director at Phillip Securities in Hong Kong. "This has been a rise in several sectors, like Chinese telcos and property companies."
The Shanghai Composite Index climbed by more than 3 per cent since the start of the week to 2,288 points, a 15-month high watermark driven in part by the release of better-than-expected economic data.
HSBC's and Markit Economics' non-manufacturing Purchasing Managers' Index, a gauge on activity in the services sector, recorded the largest month-on-month increase in nearly three years. The PMI reading hit 54.1 in August from a flat 50 the month before. Readings above 50 indicate expansion while a reading below 50 shows contraction in the market.
Shares of mainland property developers listed in Hong Kong rallied and rumours circulated that the People's Bank of China planned to promote more lending to the mainland property sector and that cities would continue to loosen the purchase controls that have dampened the market recently.
"This was one of the main reasons for the rally," said Kenny Tang Sing-hing, general manager at AMTD Financial Planning in Hong Kong.
He noted that the uptrend was likely to continue on expectations that the Hong Kong-Shanghai stock connect scheme, which will give traders in both cities mutual but limited access to those markets, will launch in October.
China Resources Land shares rose by more than 4 per cent yesterday to HK$18.42. China Overseas Grand Oceans Group jumped by 4.25 per cent to HK$4.91.
Mainland media have reported that an uptick in lending to the property sector during the last week of August could push new loans for the month to the expected 750 billion yuan (HK$946.4 billion), a positive sign for developers and the banks that lend to them.
Chinese banks rallied along side property companies. China Industrial and Commercial Bank and China Minsheng Bank both rose by more than 4.5 per cent yesterday in Hong Kong and shares at China Construction Bank followed with a 4 per cent jump.
Word that China Mobile planned to launch the latest version on Apple's iPhone also pushed up shares at the world's largest telecommunications operator by subscribers. Shares in China Mobile broke HK$100 for the first time in six years, closing at HK$101.70, up 3.8 per cent.
The release of the new phone is expected to drive up demand for the company's 4G services.
A leader at Occupy Central, a civil disobedience movement aimed at resisting Beijing's control of Hong Kong elections, said this week that the movement had failed, potentially boosting market sentiment.
The Occupy protests threatened to block access to the city's Central business district, something critics have said could hurt Hong Kong's economic performance.
Additional reporting by Sophie Yu