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Hang Seng finishes at five-month high on bright sentiment over trade deal, Wall Street gains

  • Hang Seng Index rises 1.3 per cent to its highest level since July 26
  • Profit taking drives down China markets

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Upbeat investor sentiment boosted the Hang Seng Index above the 28,000-point level on Friday. Photo: Sam Tsang
Yujing Liu

Hong Kong stocks soared to a five-month high on Friday, as investors took their cues from Wall Street gains overnight and steady progress on the US-China trade deal, while profit taking drove China markets lower.

The Hang Seng Index jumped 1.3 per cent to close at 28,225.42, the highest level since July 26. It also stood above the psychologically important 28,000-point mark, after trading resumed following the Christmas holiday.

The benchmark plunged in early August amid worsening anti-government protests. It had traded sideways until earlier this month, when a temporary ceasefire in the trade war between the US and China lifted the market. That truce is soon expected to culminate in a phase one trade deal.
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A host of positive factors encouraged investors in Hong Kong to push stocks higher, according to Kenny Tang Sing-hing, chief executive of China Hong Kong Capital Asset.

“The signing of the US-China trade deal is under way, and US stocks rose to new highs overnight. Traders are also looking forward to further monetary easing policies in China and increased government spending on infrastructure to boost the economy,” said Tang.
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Year-end “window dressing” effect could have also played a part in the gains, as fund managers adjust their positions, he added.

Overnight on the Wall Street, stocks hit fresh highs on a strong rally in technology shares. The Nasdaq Composite Index climbed 0.8 per cent on Thursday.

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