NewMainland 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.

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Published: 10:45am, 22 May 2015Updated: 5:30pm, 20 Jun 2018

Shares in HSBC rose more than 1 per cent in morning trading on Friday, following a decision by a US court to reverse a US$2.46 billion judgment against the banking giant in a securities fraud class action arising from a consumer finance business it had bought. Photo: EPA

Mainland China and Hong Kong stock markets advanced on Friday again, with the Shanghai Composite Index recording its best weekly gain since December after mainland media reported progress in state pension fund reforms that can potentially release one trillion yuan into the stock market.

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.