Hong Kong stocks gain as worries over North Korea, French elections fade

PUBLISHED : Tuesday, 09 May, 2017, 9:13am
UPDATED : Tuesday, 09 May, 2017, 6:52pm

Hong Kong stocks traded higher for the second day on Tuesday while the Shanghai Composite Index snapped five days of declines as concerns over North Korea and French elections faded.

The Hang Seng Index finished up 1.3 per cent or 311.12 points at 24,889.03, while the Hang Seng China Enterprises index gained 1.5 per cent or 146.57 points to 10,128.99.

“Worries over North Korea and the French elections previously dragged down the market but buying interest is emerging now,” said Stanley Chan, director of research at Emperor Securities. “The Hang Seng index may test the 25,000 level as people are positioning for the inclusion of A-shares into MSCI next month and sentiment may also be buoyed before next week’s Belt and Road summit.”

Stabilisation in the mainland markets also supported the H-shares of major state-owned enterprises and commercial banks, Chan said. Bank of Communications rose 1 per cent to HK$5.87 and China Construction Bank increased 1 per cent to HK$6.27. ICBC, the world largest bank by assets, was up 0.6 per cent to close at HK$5.04.

Internet-related companies saw strong trading. China’s second largest internet giant Tencent – the city’s most heavily traded stock – added 2.5 per cent to close at HK$250.80. Microware rallied 12.1 per cent to close at HK$1.95.

The Shanghai Composite Index snapped five days of declines, gaining 0.1 per cent or 1.92 points to close at 3,080.53. The CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – dropped 6.28 points or 0.2 per cent to 3,352.53, falling for the seventh trading day in its longest losing streak in more than three years amid worries over government tightening on leverage trading, although Tuesday’s decline was at a slower pace.

Stocks in Shenzhen reversed four-days of losses to tick up, with the Shenzhen Component index adding 0.5 per cent to trade at 9,885.34 while the Composite Index increased 0.7 per cent to 1,847.64. The Nasdaq style ChiNext was up 0.8 per cent to 1,802.49.