China stock market

Hong Kong stocks post best finish in a month as US jobs data eases interest rate concerns

Mainland China and other Asian markets also rise after strong job creation and low wage growth indicate that the Federal Reserve may not speed up rate rises

PUBLISHED : Monday, 12 March, 2018, 9:15am
UPDATED : Monday, 12 March, 2018, 9:29pm

Hong Kong stocks posted their best finish in a month on Monday, extending gains to a third straight session in a positive reaction to a surge on Wall Street as strong US job creation and low wage growth eased concerns over the possibility of faster US interest rate rises.

The Hang Seng Index advanced 1.9 per cent, or 598.12 points, to close at 31,594.33, the best level since February 5. The Hang Seng China Enterprises Index, or the H-shares index, climbed 2.1 per cent to 12,697.31. Turnover on the main board rose about 20 per cent to HK$120 billion (US$15 billion) from the previous session.

The US economy added 313,000 jobs in February, far exceeding expectations, while wages grew less than expected, up 2.6 per cent on an annualised basis and hinting at less inflationary pressure.

“[It’s] the best of both worlds for equity markets, with the economy in full swing but nary a sign of wage inflation. When coupled with an easing in trade rhetoric and positive news from the Korean peninsula, risk sentiment is powering higher,” said Stephen Innes, head of trading for Asia-Pacific at Oanda Corp.

Major Asian markets also closed higher on Monday after the US gains, with Japan’s Nikkei Average up 1.7 per cent at 21,824.03, South Korea’s Kospi 1 per cent higher at 2,484.12 and Australia’s S&P/ASX 200 rising 0.6 per cent to 5,996.10.

In mainland China, the Shanghai Composite Index rose for a third day, gaining 0.6 per cent to 3,326.7. The large-cap CSI300 added 0.5 per cent to 4,127.67 while the Shenzhen Composite rose 1.2 per cent to 1,908.84. The ChiNext index for start-ups gained 1.4 per cent to 1,882.41.

Among market movers in Hong Kong, internet giant Tencent rose 2.9 per cent to HK$460, accounting for 90 points of gains on the Hang Seng Index. The company is expected to report financial results on March 21.

Geely Auto gained 3.1 per cent to HK$26.65, after statistics showed the car maker topped SUV sales in the Chinese market last month, according to the China Automobile Manufacturers Association (CAAM).

Rival BYDsaw its Hong Kong-listed shares gain 2.6 per cent to HK$76.20, while its Shenzhen stock improved by 2 per cent to 66.85 yuan, after recent figures showed its February sales of alternative energy cars increased fourfold year on year.

China Resources Cement Holdings rose 4.9 per cent to HK$6.19, after reporting a 173 per cent surge in full-year profit for 2017. Credit Suisse Group upgraded its recommendation on the stock to outperform.

Prada SpA, the Italian fashion company, soared 14 per cent to HK$36.95 after executives forecast a mid- to high-single digit percentage growth in like-for-like sales this year.

On the mainland, Beijing Enlight Media gained 2 per cent to 13.16 yuan on the Shenzhen Stock Exchange after the company announced it would sell its 27.6 per cent stake in New Classics Media, a film production studio, to Tencent’s video unit for 3.3 billion yuan (US$521.8 million).