Hong Kong stocks close 0.51pc higher
Hong Kong stocks rose 0.51 per cent on Tuesday as US lawmakers inched closer to a deal to reopen the government and raising the country’s borrowing limit to head off a devastating debt default.
The benchmark Hang Seng Index added 118.20 points to finish at 23,336.52 on turnover of HK$57.73 billion (US$7.45 billion).
The gains were in line with a broad regional rally on hopes a budget agreement will be found just days before an October 17 deadline, when the government runs out of cash to pay its bills and service its debts.
After weeks of bickering Republicans and Democrats said they were close to ending a stand-off that has shut the government for two weeks, costing the government billions of dollars.
CLSA equity strategist Nicholas Smith said: “Most fund managers appear to be more frightened of being left behind if the market (surges) than of the apocalyptic scenario of failing to fix the debt ceiling on time.”
Chinese rail stocks rose after Chinese Premier Li Keqiang touted the sector in Thailand. CSR Corp. rose 5.3 per cent to HK$5.78 and China Railway Construction Corporation jumped 3.6 percent to HK$8.46.
Li’s decision to discuss the sector “even during a foreign visit showed the government considered the development of (high-speed rail) very important,” said Gary Wong, an analyst at Guotai Junan in Hong Kong.
Among other movers HSBC rose 0.77 per cent to HK$85.15, while CNOOC added 0.76 per cent to HK$15.96 and Henderson Land slipped 1.81 per cent to HK$46.15.
But Chinese shares closed down 0.19 per cent. The benchmark Shanghai Composite Index slipped 4.36 points to 2,233.41 on turnover of 138.5 billion yuan (HK$175.2 billion).
“Banks remained sluggish on lingering concerns about asset quality,” Capital Securities analyst Amy Lin told Dow Jones Newswires.
Industrial Bank dropped 2.01 per cent to 11.21 yuan, China Construction Bank fell 1.62 per cent to 4.25 yuan and Bank of China shed 1.41 per cent to 2.79 yuan.
Media firms also fell on profit-taking. Jiangsu Phoenix Publishing & Media lost 4.25 per cent to 13.30 yuan while Chinese Universe Publishing and Media dropped 2.87 per cent to 23.01 yuan.
Medical service firms bucked the trend after state media reported the government would allow more private investment in the sector. Topchoice Medical Investment surged 9.88 per cent to 36.82 yuan and Shinva Medical Instrument rose 3.55 per cent to 62.50 yuan.