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Stocks

Hong Kong stocks extend winning streak to seven sessions, their longest in more than five months

Hang Seng Index briefly hits fresh decade-high of 30,724 during the day, but soon pares back to close at 30,560.95, up 0.2 per cent

PUBLISHED : Wednesday, 03 January, 2018, 9:31am
UPDATED : Wednesday, 03 January, 2018, 10:55pm

Hong Kong stocks closed higher on Wednesday for the seventh session in a row – the longest stretch of gains in more than five months as daily turnover pushed past HK$130 billion (US$16.63 billion).

The upward movement was again boosted by technology and mainland property shares, but the pace of increase slowed from the strong rally on Tuesday.

The Hang Seng Index briefly hit a fresh decade high of 30,724 during the day, but soon pared back to close at 30,560.95, up 0.2 per cent, or 45.64 points.

The index has extended its bullish run to a seventh straight session, the longest since a 9-day winning streak ending July 20. The Hang Seng China Enterprises Index, known as the H-share index, also edged up 0.2 per cent, or 20 points, to 12,088.99. Daily turnover increased to HK$130.8 billion, slightly higher than Tuesday’s HK$127 billion.

Both figures were significantly higher than the HK$49.3 billion on December 29, the last trading session of 2017.

“Previous worries about tighter liquidity have eased and buying positions are returning after the new year,” said Linus Yip, chief strategist for First Shanghai Securities. “But the market is already at very high levels, so we still need to wait for new catalysts.”

Previous worries about tighter liquidity have eased and buying positions are returning after the new year. But the market is already at very high levels, so we still need to wait for new catalysts
Linus Yip, chief strategist for First Shanghai Securities

Tech shares tracked a rally in US counterparts on Tuesday, as Tencent advanced 1.1 per cent to HK$422, once again becoming the top contributor to gains on the Hang Seng. It alone was responsible for 32 points of gains.

AAC Technologies rose 1.8 per cent to HK$152.5. Software developer Kingsoft Corp gained 2.3 per cent to HK$26.2.

Mainland Chinese developers were stronger, too, with China Overseas Land & Development up 1.5 per cent to HK$26, and China Aoyuan Property surging 4.2 per cent to HK$5.16.

In mainland trading, the Shanghai Composite also extended gains from Tuesday and rose 0.6 per cent to close at 3,369.11, its highest level in more than a month.

The large-cap CSI300 added 0.6 per cent to 3,369.11. The Shenzhen Composite and the start-up board index ChiNext ended up 0.8 per cent and 1.5 per cent respectively at 1,934.00 and 1,795.38.

Combined turnover for Shanghai and Shenzhen markets jumped 19 per cent to 532 billion yuan (US$81.87 billion).

Last week, the People’s Bank of China announced a new mechanism that will allow some banks to reduce the amount of reserves they need to keep with the central bank, which analysts forecast would result in an injection of more than 1 trillion yuan into the banking system.

Stocks linked to the Xiongan New Area surged, after vice-premier Zhang Gaoli said after a government meeting a number of basic infrastructure and environmental protection projects would be launched, in the early moves to create Xiongan New Area in the northern province of Hebei, a crucial part in promoting the coordinated development of the Beijing-Tianjin-Hebei region.

Tianjin Capital Environmental Protection Group and property developer BBMG both soared limit-up by 10 per cent, closing at 14.49 yuan and 6.15 yuan each.

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