Hong Kong stocks close 0.65pc up Wall Street rally

PUBLISHED : Monday, 26 August, 2013, 6:39pm
UPDATED : Monday, 26 August, 2013, 6:41pm

Hong Kong shares ended up 0.65 per cent by the close Monday following a rally on Wall Street fuelled by a waning of fears the Federal Reserve will begin tapering its stimulus programme.

The benchmark Hang Seng Index climbed 141.81 points to 22,005.32 on turnover of HK$47.35 billion (US$6.11 billion).

Asian markets have seen turbulent trade over the last two months amid ongoing concerns over when the Federal Reserve will begin rolling back its massive US$85billion a month quantitative easing.

The confusion at the Fed is understandable ... the economic data are not all pointing to strong growth ahead
Joel Naroff, Naroff Economic Advisors

The stimulus has flooded markets with vast sums that many fear will now be withdrawn, hitting currencies and equities.

But on Friday, poor housing sales out of the United States led to rebounds on Wall Street and Europe that were largely copied in Asia on Monday.

“The confusion at the Fed is understandable,” Joel Naroff, chief economist at Naroff Economic Advisors, told the Dow Jones Newswires. “The economic data are not all pointing to strong growth ahead, which raises questions about the desirability of starting tapering sooner rather than later.”

In Hong Kong, gold miner shares did particularly well Monday after the price for the precious metal surged to its highest level since early June. Zhaojin Mining jumped 9 per cent to HK$7.00, putting gains so far this month at 35 per cent.

China Construction Bank rose 0.7 per cent after reporting that its net profit rose 13 per cent on year in the first half of the year due to higher interest income and commissions.

Shares in Asia’s second-largest oil refiner, Sinopec, rose 1.9 per cent in Hong Kong after the company reported a 24 per cent increase in first-half net profit as it improved its refining margins and narrowed losses at its chemical business.

Shoemaker Belle International also saw positive trade with their shares climbing 5.57 per cent to HK$11.00.

Chinese shares closed up nearly 2 per cent on, boosted by gains in financial stocks, dealers said.

The benchmark Shanghai Composite Index jumped 1.90 per cent, or 39.01 points, to 2,096.47 on turnover of 99.2 billion yuan (HK$124.7 billion).

“Banking shares rose as recently announced half-year earnings were not bad,” Haitong Securities analyst Zhang Qi told AFP.

“Investors also speculated in shares of Shanghai-based firms after the approval of a free trade zone,” he said.

Pudong Development Bank gained 3.80 per cent to 8.74 yuan while Bank of Communications rose 1.30 per cent to 3.91 yuan. Last week, both banks reported rises in their net profits for the first half of this year from the same period last year.

Brokerages rose after heavy selling last week on concerns a trading error by Everbright Securities might lead to tighter regulation.

Southwest Securities advanced 7.24 percent to 9.33 yuan and Sinolink Securities jumped 5.65 per cent to 12.53 yuan.

Everbright rose 4.17 per cent to 10.25 yuan after a nearly 19 per cent slump last week.

Some Shanghai-based firms extended gains after the central government last week approved a free trade zone in the city.

Shanghai Jinqiao Export Processing Zone Development surged by its 10 per cent daily limit to 9.67 yuan while Shanghai Zhangjiang Hi-Tech Park Development also jumped 10 per cent to 6.51 yuan.