Emmanuel Macron

Macron’s French election win boosts Hong Kong stocks, as world breathes sigh of relief

Resounding French election victory provides rising support for global equities. In Hong Kong, debt-ridden China Huishan Dairy suspends trading indefinitely

PUBLISHED : Monday, 08 May, 2017, 9:13am
UPDATED : Wednesday, 30 August, 2017, 5:31pm

Hong Kong stocks closed higher on Monday, joining a rally in global equites, driven by the victory of market favourite centrist candidate Emmanuel Macron in France’s presidential election.

The Hang Seng Index closed up 0.4 per cent or 101.56 points at 24,577.91, and the Hang Seng China Enterprises index jumped 0.6 per cent or 56.16 points to 9,982.42. Chinese mainland stocks retreated, however.

Tokyo’s Nikkei 225 added 2.3 per cent to trade at 19,895.70, and Sydney’s S&P/ASX 200 increased 0.6 per cent at 5,897.83.

Macron won the French presidential run off after gaining roughly 65 per cent of the vote, easily beating Marine Le Pen, the far-right choice, who had not ruled out the possibility of attempting to exit France from Europe (Frexit). She took 35 per cent of the vote.

Macron’s win provided rising support for global equities that were partially depressed by political concerns.

“Hong Kong stocks got relief after Macron’s victory,” said analysts from Guodu Hong Kong.

“However, the Hang Seng Index will be pressed to break 24,400 points as global uncertainties remain.”

Matthew Siddle, portfolio manager, European equities at Fidelity International, said Macron’s victory “will be welcomed by markets, although it has been widely anticipated since the first round results”.

“Execution of his agenda will depend on the result of the legislative elections in June and his ability to form a majority, so it is too early to say what the exact impact will be, while optimism and lead indicators are already high.”

In Hong Kong, Geely Auto climbed 4.5 per cent at HK$10.72 after the car maker announced the total sales volume was 86,727 units in April, a thumping 94 per cent increase over the same period last year.

However, Macau casino operators retreated, worried that further regulations are in the pipeline to curb money laundering in the world’s largest casino hub.

Macau’s government now requires facial recognition and identification card checks at ATMs before Chinese UnionPay cardholders can withdraw cash.

Wynn Macau led losses, dropping 1.6 per cent to HK$15.92 while Galaxy Entertainment Group dropped 1.4 per cent to close at HK$39.95. Sands China was down 1.1 per cent at HK$34.4

Elsewhere, China Huishan Dairy said Hong Kong Stock Exchange has ordered an indefinite suspension of any trading in its shares according to an instruction by the Securities and Futures Commission, the city’s securities regulator.

The company has suspended trading since a dramatic 85 per cent stock price plunge on March 24 knocked US$4 billion off its market value within 90 minutes.

That was followed by the resignations of all but two of its board members amid revelations that Huishan is stuck in a cash crunch while sitting on an estimated US$5.8 billion of debt, owed to some 70 lenders.

Chinese mainland stocks retreated on Monday, however.

The Shanghai Composite Index dropped 0.8 per cent to 3,078.61 while the CSI 300 – which tracks large caps listed in Shanghai and Shenzhen – was down 0.7 per cent to 3,358.81.

The Shenzhen component index slid 1.9 per cent to close at 9,833.17, while the Nasdaq style ChiNext fell 1.6 per cent to 1,788.71.

China released April trading data on Monday, which showed the country’s surplus widened to $38.05 billion from $23.93 billion March.

However, imports rose 11.9 per cent in April, slowing from a 20.3 per cent gain in the previous month and exports increased 8 per cent after 11.3 per cent rise in March.