Hong Kong stocks rise to 1-week high on China easing hope, resilient US data
Hang Seng Index pares loss for the week after governor of China’s central bank signals more room for policy loosening
The Hang Seng Index gained 0.5 per cent to 26,749.51 at the close, finishing at a one-week high and trimming the decline for the five-day period to 0.4 per cent. The Hang Seng Tech Index rose 0.6 per cent.
On the mainland, movements in stock prices remained subdued this week after the securities regulator tightened the margin requirement for leveraged trading to rein in overheated sentiment. The CSI 300 Index slipped 0.5 per cent and the Shanghai Composite Index added 0.3 per cent, highlighting a pattern where closing daily movement on each gauge did not exceed 0.5 per cent either way every day this week.
Japanese bonds once again came to the fore among investors after roiling global financial markets earlier in the week. Investors dumped the two-year Japanese bond on Friday, with its yield surging by 2.7 basis points to 1.24 per cent – a level not seen since August 1996 – after the Bank of Japan raised its inflation forecast but stood pat on the benchmark interest rate at its January policy meeting. Still, the yield on the bond maturing in 40 years fell for a fourth day to 3.917 per cent.
Stocks’ recovery on Friday capped an eventful week that saw a reversal of a tariff threat by the US against Europe and an easing of the contagious effect of the turbulence in Japanese bonds. A dovish tone by China’s central bank injected an additional dose of optimism after it cut the rates on structural policy tools including the relending one last week.