Hong Kong Stock Exchange

Hong Kong, mainland stocks close higher ahead of US presidential election

The Hang Seng Index was up 0.47 per cent at 22,909, while the Hang Seng China Enterprises Index increased 0.54 per cent to 9,660

PUBLISHED : Tuesday, 08 November, 2016, 9:29am
UPDATED : Tuesday, 08 November, 2016, 10:31pm

Hong Kong and mainland stock markets closed higher on Tuesday hours before the US presidential election, after US indices notched up their biggest gains in eight months.

The Hang Seng Index ended the day up 0.47 per cent or 108.07 points at 22,909.47, while the Hang Seng China Enterprises Index added 0.54 per cent or 51.61 points to 9,659.85.

While the Hang Seng has risen three days in a row, the recent gains are “expected to be short-lived”, according to Zhao Wenli, the chief strategist at China Merchants Securities (Hong Kong).

“There has been a lot of negative news coming out recently, hitting heavyweights including real estate developers and insurance companies,” Zhao said. “We can’t see many heavyweights shoring up the index in the near future.”

Property stocks were mixed after the sector plunged to a three-month low on Monday following the Hong Kong government’s decision to raise the stamp duty for non first-time real estate buyers to 15 per cent.

Sun Hung Kai Properties gained 1.64 per cent to HK$105.70 after plummeting 9.88 per cent on Monday. Wharf Holdings rebounded 1.52 per cent to HK$56.90 after falling 2.7 per cent the day before.

But Henderson Land slipped 0.35 per cent to HK$42.95 after its 6 per cent decline on Monday.

Energy stocks gained on Tuesday as oil prices stabilised, with the mining sector up 1.14 per cent and oil and gas companies rising 0.82 per cent.

Zijin Mining advanced 1.95 per cent to HK$2.61 and PetroChina added 0.19 per cent to close at HK$5.4.

While Brent crude prices rose 8 cents to US$46.23 a barrel, concerns remain about whether Opec countries will be able to cut oil production to address global oversupply.

China’s release of October export data also showed oil imports easing last month, although it “remained at elevated levels”, ANZ bank said.

As a result, China’s third-largest oil company China National Offshore Oil Corporation lost 0.51 per cent to HK$9.80 and China Shenhua dropped 2.30 per cent to HK$17.02.

On the mainland, the Shanghai Composite Index rose 0.47 per cent to 3,147.89 while the CSI 300, which tracks the large caps listed in Shanghai and Shenzhen, gained 0.43 per cent to 3,371.12.

The Shenzhen Component Index increased 0.64 per cent to 10,763.13 while the Nasdaq-style ChiNext was up 0.94 per cent to 2,150.30.

The benchmark index gains came despite the latest data showing China’s exports fell in October, with overseas shipments dropping 7.3 per cent from a year earlier in dollar terms, adding to depreciation pressure on the currency. Exports to the US slipped 5.6 per cent in October and those to the EU were down by 8.7 per cent.

“Trade data out of China was a little disappointing but not enough to trigger a change of policy in China,” said Andrew Sullivan, managing director for sales trading at Haitong Securities International.

The People’s Bank of China cut the daily reference for the yuan by 0.14 per cent or 92 basis point to 6.7817 on Tuesday, weakening it for a third consecutive day. The central bank allows the yuan to be traded 2 per cent either side of the reference rate.

US shares had their best day since March on a percentage basis with all three major indices surging on Monday. The Dow Jones Industrial Average finished 2 per cent higher at 18,259, reclaiming the key 18,000 level. The S&P 500 rose 2.2 per cent to 2,132, ending its nine-day losing streak, the longest since 1980. Meanwhile, the Nasdaq Composite advanced 2.4 per cent to 5,166.

The market was lifted by the announcement by the Federal Bureau of Investigation that its review of a new batch of Democratic presidential nominee Hillary Clinton’s emails won’t lead to charges.

Investors are now turning their focus to the results of the US presidential election between Clinton and Republican nominee Donald Trump, as voting takes place late Tuesday and early Wednesday Hong Kong time.

Elsewhere in Asian trading, Tokyo’s Nikkei lost 0.03 per cent to 17,171.38, South Korea’s Kospi gained 0.29 per cent, and the Sydney All Ordinaries advanced 0.21 per cent.