New | Mainland China, Hong Kong markets on a roll
Hong Kong stocks bounced back in morning trading on Friday after two days of losses, buoyed by gains in US and mainland China shares on speculation that the Federal Reserve will stay put longer on interest rate rises and Beijing will further ease policies to prop up the economy.
Market sentiment in Hong Kong also remained strong, lifting shares of blue-chips including Li Ka-shing’s CK Hutchison Holdings and Hutchison Whampoa, as well as and Ping An Insurance, to their highest levels in a year.
The fund recognition scheme, which was widely expected by the market, was finally cleared. Funds domiciled in the mainland and Hong Kong will be sold in each others’ territories from July.
The Shanghai Composite index rose 2.83 per cent, or 128.18, to 4,657.60, the highest level since February 2008. The surge in the benchmark index was driven by inflows into index heavyweights like Sinopec, PetroChina and state-owned lender ICBC, whose shares rose 4.4, 3.4 and 2.7 per cent, respectively.
The Shenzhen Composite added 1.1 per cent to 16,045.80, but the tech-heavy ChiNext board edged down 0.31 per cent to 3,516, ending five straight days of gains.
“In addition to a dovish Fed statement, all eyes are on China’s state pension fund, which manages 3.5 trillion yuan,” said Ben Kwong Man-bun, a director of securities firm KGI.
The Securities Journal said a proposal for an overhaul of the state pension fund is ready to be submitted to the State Council and details of the reform measures could be announced as early as the third quarter.
More than 200 mainland-traded stocks – including railway operators and steel makers – hit the 10 per cent daily ceiling and were suspended from trading. Liquidity in the two markets remained buoyant, with shares of nearly 2 trillion changing hands yesterday.
Outstanding balance of margin trading reached 2.03 trillion yuan at the end of the day on Thursday, according to exchange data.
Shares in financial companies and energy firms in Hong Kong rose sharply, with only 5 out of 50 stocks in the Hang Seng Index finishing in the red. Both CK Hutchison Holdings and Hutchison reached their 52-week high, rising 0.5 and 1.6 per cent, while Ping An Insurance jumped 5.5 per cent to HK$119.2, another 52-week high.
BOC Hong Kong was the major mover yesterday, after the Hong Kong unit of Bank of China said it was considering a sale of subsidiary Nanyang Commercial Bank, which could fetch about US$6 billion. Shares of BOC Hong Kong jumped 9 per cent at one stage, before finishing up 8.2 per cent to a one-year high of HK$33.15.
Turnover in the main board and the growth enterprise board increased to HK$146 billion from HK$137 billion the previous day.
On a weekly basis, the Shenzhen Composite was the best performing Chinese index, rising up 12.2 per cent this week, followed by a 11.8 per cent increase in ChiNext, the Nasdaq-style board of technology companies and start-ups.
There was no nortbound trading yesterday under the stock connect programme as the Hong Kong stock market will be closed on Monday, a public holiday.
