Market Wrap: Hong Kong stocks near 2012 high after China GDP
Hong Kong stocks had another strong session after gross domestic product (GDP) data from China encouraged investors, and hot money flowed into cement-makers and Chinese developers, powered by speculation that the world’s second largest economy is bottoming out.
Hong Kong stocks had another strong session after gross domestic product (GDP) data from China encouraged investors, and hot money flowed into cement-makers and Chinese developers, powered by speculation that the world’s second largest economy is bottoming out.
Funds flowed from safe-haven utilities to riskier counters such as property and financial stocks, as investors decided that the 7.4 per cent rise in third-quarter gross domestic product (GDP) was in line with expectations and removed uncertainty that has been casting a pall over the market.
The benchmark Hang Seng Index added 102.07 points, or 0.48 per cent, to close at 21,518.71, just below the 2012 intra-day high seen on February 20 when the index closed at 21,760.3. Daily turnover jumped to HK$70.94 billion on Thursday, the highest level since September 14, when the US announced the third-round of quantitative easing.
“Investors were busy building positions in property, banks, insurers and material firms, on speculation that the economy is on the road to recovery,” said Peter So, managing director of research division at CCB International. He predicts the benchmark will reach 22,500 by the year-end.
The Shanghai Composite Index gained 26.07 points, or 1.24 per cent, to finish at 2,131.69, the highest since August 14.
“It might take another couple of quarters for growth to significantly recover, but we believe the risk for a hard landing is getting increasingly smaller, we at least could be confident to expect stabilisation,” said Lu Ting, an economist with the Bank of America Merrill Lynch.
China-related issues outperformed the benchmark. The Hang Seng China Enterprises Index, which tracks the performance of Hong Kong-listed Chinese firms, added 144.79 points, or 1.38 per cent, to finish at 10,636.25.
“We expect that house prices will stabilise in the second half of the year, and housing market activity to gradually bottom out,” JP Morgan said in a research note on Thursday.
“On the policy front, existing property tightening measures will continue, but no new tightening measures will be introduced in the near term,” it said.
