Hong Kong, mainland China stocks rally after US stocks soar, but reverse gains at close on Thursday
- Hang Seng Index closes 0.3 per cent higher, while Shanghai Composite Index sheds early gains to end lower for fourth session
- Regional stocks fare better, with indices in Japan, South Korea and Australia reporting gains
A rally in Hong Kong and mainland China stocks on Thursday morning proved to be short lived. Profit-taking orders flooded the market in the afternoon as investors remain cautious over the US-China trade war, said brokers.
The morning’s rally in Asian stocks followed the US market, which soared by the most since the 1982 midterm elections, but in the afternoon different markets moved in different directions.
In Hong Kong, the benchmark Hang Seng Index was once up 1.3 per cent in morning trading but narrowed down its gains to 0.3 per cent to close at 26,227.72 on Thursday. The Hang Seng Chinese Enterprises Index was up 0.6 per cent to 10,703.59.
In China, the markets fared worse and shed their morning gains to end lower for a fourth day in a row.
The benchmark Shanghai Composite Index, which was at one point trading up 1 per cent, ended the day 0.2 per cent lower to close at 2,635.63. The CSI300, which tracks the largest stocks listed in Shanghai and Shenzhen, was down 0.3 per cent to 3,212.77. The Shenzhen Component Index fell 0.7 per cent to 7,698.02.
“There were a lot of profit-taking orders in afternoon trade, as investors wanted to cash out once the markets bounced back. There is tough resistance for the market to go up any higher, as investors are still worried about the trade war,” said Robert Lee, executive director at brokerage firm Grand Finance Group.