Chinese stocks buoyed by better-than-expected exports data, Ping An Bank earnings, record first rise in seven days
- But Shanghai trading volume 9.3 per cent below 30-day average, signalling lack of sustained buying interest
- Hang Seng Index rises for a second day
Chinese stocks rose for the first time in seven days, as better-than-expected exports data and strong results by Ping An Bank provided some relief to investors, suggesting the fallout from the US-China trade war might not be as bad as anticipated.
The Shanghai Composite Index added 0.9 per cent to 2,794.55 on Thursday, ending a six-day, 6.2 per cent losing streak that sent the benchmark to a five-month low. However, the trading volume on the Shanghai exchange was 9.3 per cent below its 30-day average, signalling a lack of sustained buying interest and that the uptick in equities might be temporary.
The yuan strengthened against the US dollar in both onshore and offshore markets, even as the Chinese central bank set a weaker daily reference rate for the currency.
In Hong Kong, the Hang Seng Index gained 0.5 per cent to 26,120.77, even as a technical indicator suggested stocks on the benchmark were oversold.
Sentiment on equities was boosted, after China’s customs office said on Thursday morning the country’s overseas shipments had increased 3.3 per cent from a year earlier last month in US dollar terms. A Bloomberg survey of economists had forecast a 1 per cent decline.
“The market has been this week significantly impacted by the trade situation, which has muted the impact of decent earnings,” said Gerry Alfonso, director of the international business department at Shenwan Hongyuan Group in Shanghai. “Overall, the market seems to have shifted focus today from the trade situation onto more domestic issues.”
Chinese stocks also got a lift from international index compiler MSCI, which said on Thursday it will raise the weighting of mainland China traded shares on its gauge tracking emerging markets, following the market close on August 27. After the rebalance, Chinese stocks will account for 2.5 per cent of the MSCI Emerging Markets Index.
Ping An Bank’s interim result showed a 15 per cent increase in first-half profit, which also spurred buying.
Its stock jumped 6.2 per cent to 14.38 yuan for its biggest gain since April 16. The bank’s net income for the first six months increased 15 per cent from a year earlier to 15.4 billion yuan (US$2.19 billion), as net interest margins widened and its ratio of non-performing loans fell, the lender said in an exchange statement. Shenwan Hongyuan Group said it expected the bank to trade at 1.5 times its book value, indicating a gain of 56 per cent from the current price.
Semiconductor maker Amlogic and Shanghai Friendess Electronic Technology surged almost fourfold on their first day of trading on the Science and Technology Innovation Board, or Star Market. Amlogic jumped 272 per cent from its offer price to 143.36 yuan, while Shanghai Friendess rose 255 per cent to 243.88 yuan. The surge came despite the initial public offering shares of both companies being priced higher than the industry average.
In Hong Kong, Swire Pacific gained 3 per cent to HK$85.30. Its first-half profit jumped 12 times from a year earlier to HK$15.85 billion, buoyed by the sales of two property units, said the company that runs businesses ranging from real estate to aviation and beverages. Profit increased 40 per cent if gains from asset disposal are excluded, it said.
