Blue chips shrug off US inflation worries as more hot money returns
Hong Kong stocks yesterday continued their rebound from Monday's drop, the largest single-day slide since June, fuelled largely by speculation over a yuan appreciation.
Despite a mid-morning trading dip triggered by worries over new United States inflation data, the benchmark Hang Seng Index recovered to close up 95.68 points, or 0.7 per cent, at 13,597.31.
'The index tested the bottom and found very strong support at 13,200,' said Peter Lai Wing-leung, director of sales at DBS Vickers.
Core conglomerates and property counters performed well. Ports-to-telecoms operator Hutchison nudged up 0.74 per cent to close at $68. Property firm Swire Pacific rose almost 2 per cent to $64.75, while Sun Hung Kai Properties gained 1.05 per cent to close at $72.25.
Trading volume was heavier than in recent days, with turnover of $16.3 billion. Analysts attributed the upswing in key Hong Kong shares to the influx of more funds betting on a yuan revaluation.
'Because of speculation on a yuan appreciation, hot money is returning to Hong Kong,' said Louis Wong Wai-kit, director of Phillip Securities. 'Hong Kong will remain resilient in the next few weeks if the hot money keeps coming in. But the pressure on China to appreciate the yuan will increase.'
