Hong Kong stocks track higher, led by property, Macau casinos

PUBLISHED : Tuesday, 28 March, 2017, 10:28am
UPDATED : Tuesday, 28 March, 2017, 10:48pm

Hong Kong stocks bounced back on Tuesday, lifted by rising hopes for the US president’s upcoming economic stimulus policies.

The Hang Seng Index rose 0.63 per cent, or 152 points, to 24,345 at the close. The Hang Seng China Enterprises Index, known as the H-shares index, also gained 0.62 per cent, or 63.87 points, to 10,425.

Asian stocks mostly advanced on hopes that President Donald Trump’s planned fiscal stimulus polices will include tax reforms. In Tokyo the Nikkei 225 added 1.1 per cent to close at 19,202, while the Kospi in South Korea also gained 0.4 per cent to 2,163.

Although the health care reform vote had failed, the market has likely recognised that the retention of the current plan would mean the avoidance of a mild fiscal shock to the economy
Jingyi Pan, strategist, IG Group

“Property shares, especially mainland ones, suffered losses on Monday from China’s latest property purchasing curbs, but they rebounded today, which contributed to the rise of the Hang Seng Index,”

said Castor Pang Wai-san, head of research at Core Pacific Yamaichi.

Among the market movers, Macau casinos advanced broadly, with Galaxy Entertainment closing up 3.5 per cent to HK$42.65, and Sands China gaining 4 per cent to HK$36.25, after several investment banks forecast an increase in gambling revenues for March.

Technology heavyweight Lenovo also gained, with its shares up 3.9 per cent to close at HK$5.97.

“Although the US health care reform vote had failed, the market has likely recognised that the retention of the current plan would mean the avoidance of a mild fiscal shock to the economy, ” said Jingyi Pan, a strategist for IG Group.

“The easing of bearish sentiment overnight nevertheless bodes well for Asian markets.”

Investors may also be optimistic that the Trump administration can still deliver the far-reaching tax reform bill, analysts said.

In New York on Monday, stocks gained back some ground as concerns over the failure of Trump’s health care reforms eased, with the major indexes ending mixed.

The Dow Jones Industrial Average closed lower for an eighth straight session, marking the longest losing streak since August 2011. The S&P 500 also dropped 0.1 per cent to close at 2,341.59. However, the Nasdaq Composite ended up 0.2 per cent at 5,840.37.

Chinese banks largely gained ground on hopes for their expected to be positive annual results due after the close of regular trading on Tuesday. Agricultural Bank of China and Bank of Communications closed up 0.6 per cent and 0.7 per cent respectively to HK$3.59 and HK$6.09. The two lenders are scheduled to release their annual results later in the day.

However, on the Chinese mainland, the Shanghai Composite Index dropped 0.4 per cent to end at 3,252.95. The large-cap CSI300 closed 0.2 per cent lower to 3,469.81.

The Shenzhen Composite Index and the ChiNext start-up board both ticked lower, down 0.3 per cent and 0.2 per cent respectively to 2,034.21 and 1,944.36.

In Shanghai, shares of China Southern Airlines surged 4.3 per cent, before settling back to close at 7.94 yuan at, reflecting a gain of 0.7 per cent.

China Southern Airlines’ Hong Kong-listed shares closed 2.7 per cent lower at HK$5.34.

On Monday night, China Southern said in an exchange filing that it had reached an agreement with American Airlines for “possible strategic cooperation” including an H-share sale and other business collaboration.

In a separate filing on Tuesday morning, the carrier said it will sell more than 270 million shares to American Airlines at HK$5.74 apiece. The company said it will use the net proceeds for “supplementing general working capital”.