Hong Kong shares up, China stocks stable as Beijing moves to help economy
Promises of a ‘more proactive’ fiscal policy and extra cash for the banking system buoy sentiment
Hong Kong stocks rose slightly on Wednesday and mainland Chinese markets stabilised, supported by Beijing’s attempts to stimulate the country’s economy amid trade tensions with the United States.
The Hang Seng Index ended up 0.9 per cent, or 258.33 points, to 28,920.90, and the China Enterprises Index gained 0.91 per cent, or 100.24 points, to 11,074.16.
In mainland China, the Shanghai Composite Index ended down 0.06 per cent, or 1.91 points, at 2,903.65, the CSI 300 index dropped 0.1 per cent, or 3.96 points, to 3,577.75 and the ChiNext gauge of smaller companies finished up 0.16 per cent, or 2.71 points, at 1,632.32.
On Monday China’s State Council said it would adopt a “more proactive fiscal policy” and speed up raising and spending of 1.35 trillion yuan (US$199 billion) for local governments, to be spent on infrastructure. Beijing also injected 500 billion yuan (US$73.57 billion) into the banking system as it sought to aid a recovering yuan which has hit a one-year low against the US dollar.
“China is releasing tension and helping the market return to a normal situation,” said Gordon Tsui, managing director of Hantec Pacific. “It will create a very positive and proactive cue for investors to think there should be a change in market sentiment.”
Hong Kong banks saw the highest turnover of the day, at HK$9.12 billion. Hang Seng Bank rose 1.5 per cent to HK$206.20, having broken a yearly high earlier in the day. China Construction Bank gained 0.7 per cent to HK$7.19 and HSBC Holdings was up 0.54 per cent to HK$75.05.