Hong Kong shares climbed their most in five weeks charged by a mid-afternoon flash that left traders confused over whether corporate results, an overly active futures market or a key index upgrade spurred the buying. Mainland markets closed lower.
The benchmark Hang Seng index rose 2.4 per cent to 22,888.92 at one point, jumping 175 points within five minutes. The China Enterprises Index rose 1.59 per cent to 10,408.93. Total market turnover, at HK$80 billion, was in line with the recent daily average, though southbound traffic along the stock connect between Shanghai and Hong Kong was weaker than usual.
There was more activity in the futures market, where the volume of contracts traded reached the second highest level in two months. With the market rising since October, short sellers have been squeezed, said Louis Tse Ming-kwong of VC Brokerage, and are repositioning themselves to compensate.
Financials led the gains, with Asian insurance giant AIA among the biggest movers by turnover, up 3.75 per cent to HK$48.45. China Construction Bank was 2.38 per cent stronger at HK$2.38 and Bank of China rose 1.15 per cent to HK$3.53. The rise in mainland bank shares was all the surprising after Chinese regulators announced an 1.7 billion yuan fine on an unnamed bank for loan misselling.
Better than expected earnings and an upgrade from Daiwa from ‘hold’ to ‘outperform’ saw shares in Semiconductor Manufacturing surge 14.29 per cent to 88 HK cents. Computer maker Lenovo jumped 5.77 per cent to HK$7.70 on strong results.
Hong Kong Exchanges and Clearing rose 1.91 per cent to HK$213.8, after it reported an 81 per cent year-on-year net profit growth for the third quarter on Wednesday.