Daily Report | Hong Kong, China shares rebound as US stocks test 20,000 threshold

Hong Kong and mainland Chinese stocks rebounded to end several days of falls, thanks to the strong rally in the United States and a stabilisation of the mainland’s bond market.

The Hang Seng Index closed 0.37 per cent higher at 21,809.8, ending a four-day drop as the financial and energy sectors rose. The benchmark has been stranded below 21,914 — its level at the start of the year — for three days. The Hang Seng China Enterprises Index gained 0.52 per cent to 9,331.63.

“The market is actually quiet ahead of holidays. Turnover is low. But a low daily turnover may lead to higher volatility as it’s easier to push up and drag down the benchmarks,” Sam Chi-yung, senior strategist of South China Research, said.

Daily turnover dropped to HK$47.6 billion from HK$53.8 billion a day earlier, much lower than an average of HK$60 to HK$70 billion last week.

The stock rally in the United States, supported by the strengthening US dollar following the presidential election and the Fed interest rate rise, may give some support to the Hong Kong market, Sam said.

“I am positive on the US market before Donald Trump’s inauguration on January 20. The Dow Jones can notch up 20,000 sooner or later as people are excited about Trump’s policies,” Sam said. “But we may see sell-offs if Trump fails to realise his promises.”