Hong Kong stocks highest in over two years, boosted by property developers
Country Garden surged 7.2 per cent, Sun Hung Kai Properties gained 2 per cent, and Evergrande rose 3.7 per cent at close on Wednesday
Hong Kong stocks reached their highest level in almost two and a half years at the close on Wednesday, as property developers, banks and insurers led the gains.
The benchmark Hang Seng Index advanced 0.7 per cent, or 206 points, to finish the Wednesday session at 28,379.2, the highest since April 29, 2015. The increase follows a surge of 2.3 per cent on Tuesday, its best one-day percentage gain since May 2016.
The Hang Seng China Enterprise Index was up 0.8 per cent, or 91.8 points, at 11,397.2.
“Market sentiment and fundamentals are being lifted by the good performance of the global economy, and Hong Kong’s economy is growing at a faster pace too,” said Stanley Chan, director of research at Emperor Securities.
Investors are also speculating about the highlights of the annual policy address by Chief Executive Carrie Lam Cheng Yuet-ngor to be delivered next Wednesday, Chan said. In her first policy speech since taking office in July, Lam will present her major government objectives and plans.
“The address might include an increase in government spending,” said Chan.
Echoing Chan, Alex Wong Kwok-ying, director at Ample Finance Group said the index should keep rising amid the strong market sentiment.
“After the mainland markets resume trading next week, there will be a bit profit-taking, but not too much,” he said.
Mainland Chinese markets in Shanghai and Shenzhen stay closed during the eight-day national day holiday from October 1 to October 8, and will resume trading on October. 9.
The Hong Kong stock market will be closed on Thursday, a public holiday in the city.
In Hong Kong, property developers led the advances.
Country Garden surged 7.2 per cent, and Sun Hung Kai Properties gained 2 per cent. Evergrande rose 3.7 per cent at the close.
Financials extended their gains from Tuesday, as banks and insurers are seen benefiting from the C Chinese central bank’s decision to cut the reserve requirement ratio (RRR) to boost lending to small businesses and the agricultural sector.
“The cut of RRR is a catalyst, as the fundamentals and profitability of banks are quite solid,” said Chan.
ICBC rose 1.8 per cent, and China Construction Bank added 0.3 per cent. Among insurers, China Life jumped 0.6 per cent, while AIA moved up 1.7 per cent.
Geely Automobile, the biggest non-state owned carmaker in China, gained 4.9 per cent after the company increased its stake in Denmark’s Saxo Bank to above 50 per cent.
The rise in Hong Kong stocks follows sharp gains in the US markets, which reached record highs for a second straight day on Tuesday, extending a five-day winning streak.
Strong September car sales lifted vehicle makers, as motorists rushed to replace cars damaged by two deadly hurricanes.
Elsewhere in Asia, Japan’s benchmark Nikkei 225 gained 0.06 per cent to 20,626.7, while the Sydney All Ordinaries dropped 0.8 per cent to 5,719. South Korea’s market is closed for a public holiday.