Hong Kong shares nudge higher on oil price jump and possible BoE rate cut; mainland stocks flat

Hong Kong stocks firmed up on Thursday thanks to a rebound in crude oil prices and expectations of more monetary easing policies from the Bank of England.

The Hang Seng Index edged up 0.43 per cent or 93.11 points to 21,832.23 while the Hang Seng China Enterprises Index gained 0.29 per cent to 9,004.62.

Banking, insurance, autos, oil and property sectors all gained, as did Macau casinos.

“The Hong Kong market was primarily fuelled by the rise in the US market after the surge in oil prices and the better-than-expected jobs figure,” said Li Mingyi, an analyst from China Investment Securities in Hong Kong. “Meanwhile, expectations for an interest rate cut by the Bank of England also fuelled the market.”

CNOOC shares outperformed blue chips to gain 3.05 per cent to HK$9.12 as crude oil prices in New York and London both jumped over 3 per cent. They now stand above the US$40 threshold as US crude inventories unexpectedly rose by 1.4 million barrels last week amid a fall in gasoline inventories.

PetroChina shares rose 0.38 per cent to HK$5.23 while China Petroleum & Chemical Corporation, or Sinopec, rose 0.36 per cent to HK$5.52.

Standard Chartered shares gained 3.81 per cent to end at the highest level this year at HK$64.05, tracking the gains made in its London-listed stock after it announced better than expected first half results.

HSBC Holdings shares surged a further 2.71 per cent to HK$53 thanks to the surprising US$2.5 billion share buyback plan it announced on Wednesday.

The Bank of England’s monetary policy announcement is due at 7pm local Hong Kong time. Despite BOE’s decision in July to keep interest rates unchanged, investors still expect it to cut its key policy rate by 25 basis points to shore up economic growth in the post-Brexit world.

Over on the mainland, China Vanke saw its A shares in Shenzhen soar by their daily limit of 10 per cent to 19.67 yuan, following mainland media Caixin’s report that another developer, China Evergrande Group, had bought Vanke’s A shares, with part of the investment from the personal capital of Evergrande chairman Hui Ka-yan. China Evergrande denied the reports but later said it would “withdraw its denial” and make an announcement later.

The stock markets in Shanghai and Shenzhen recovered from small losses in the morning to end higher, thanks to a surge in the property and telecommunication sectors. Banking, coal and transportation sectors fell.

The Shanghai Composite Index closed only 0.13 per cent higher to 2,982.43 while the CSI 300, which tracks large companies listed in Shanghai and Shenzhen, traded 0.24 per cent higher at 3,201.29.

The Shenzhen Composite Index was up by 0.73 per cent to 1,948.91 while ChiNext climbed 1.01 per cent to 2,129.65

Dongxing Securities said in a research note that the Shanghai Composite Index is expected to fluctuate between 2,800 and 3,100 in the second half of the year, as Chinese regulators tighten up rules on the market.

A batch of initial public offerings this week, including Bank of Guiyang, attracted capital away from other stocks as mainland’s IPOs often generate sharp gains after their debut, according to analysts.