Hang Seng surges past 26,000 points, led by surge in property stocks
The Hang Seng Index rallies above the 26,000 level in intraday trade; analysts say upward momentum to continue
Hong Kong stocks rose Tuesday to end just shy of the key 26,000 mark, led by a broad surge in mainland and Hong Kong property developers. .
The Hang Seng Index briefly topped 26,000 in late trading, but pared gains in the final minutes to close at 25,997.14, up 0.5 per cent, or 134.15 points.
The last time the index closed above 26,000 was on July 3, 2015.
The Hang Seng China Enterprises Index, known as the H-shares index, finished 0.1 per cent higher, or 9.21 points, at 10,606.26.
Daily turnover reached HK$74.6 billion (US$9.57 billion), almost unchanged from Monday’s HK$74.7 billion.
“The Hang Seng Index faces some resistance at the 26,000 level. But we expect its upward momentum to continue,” said Wei Wei, an analyst for Ping An Securities. “Its short-term support level should be 25,645.”
“In terms of sectors, money seems to have switched from the financial names and flown into the property stocks,” he said.
China Evergrande Group jumped 5 per cent to a new all-time closing high of HK$16.68. The company reported a 76 per cent increase in its contract sales for last month.
Mainland developers Zhong An Real Estate and Future Land Development both soared more than 10 per cent. Greentown China and Ronshine China climbed 6.5 per cent and 5.7 per cent respectively to HK$8.74 and HK$7.37. Shimao Property gained 5 per cent to close at HK$14.14.
Among Hong Kong developers, New World Development surged 7.6 per cent to HK$10.8, the highest level in four years.
Sun Hung Kai Properties and Wheelock and Company advanced 4.7 per cent and 3.5 per cent each, closing at HK$123.8 and HK$63.
However, Carson Block, founder of short-seller Muddy Waters, said in a Bloomberg interview that he has identified a target in the Hong Kong stock market and said he would reveal the company’s name on Wednesday.
His comments triggered a plunge in several small and mid-cap Hong Kong stocks. Wisdom Sports slid 13.67 per cent to HK$1.2, Tongda Group dropped 10.2 per cent to HK$2.02, and Man Wah Holdings fell 8.2 per cent to HK$6.73.
“Investors are very skittish, selling these stocks even before being able to properly assess the report that is rumoured to come out tomorrow,” Kenny Wen, wealth management strategist at Sun Hung Kai Financial said.
On the mainland, the Shanghai Composite Index closed modestly higher after choppy session, rising 0.3 per cent to 3,102.13.
The CSI 300, which tracks large companies listed in Shanghai and Shenzhen, rose 0.7 per cent to 3,492.88.
The Shenzhen Composite Index and the Nasdaq style ChiNext also settled higher, up 0.6 per cent and 0.3 per cent respectively to 1,810.80 and 1,766.39.
Combined turnover for the Shanghai and Shenzhen markets eased to 298 billion yuan.
Brett McGonegal, chief executive of Capital Link International, said investors have shrugged off concerns from late May when Moody’s Investors Service surprised markets by cutting China’s credit rating, citing a worsening debt outlook.
“The Chinese government does not want to see any weakness in the market ahead of the People’s Congress in October, so whatever pullback could just be short term fluctuations,” McGonegal said.
Car maker Zhonghang Heibao jumped 4 per cent to 29.92 yuan, SAIC Motor rose 3.4 per cent to 30.21 yuan, and Anhui Zotye Automobile gained 2.4 per cent to 13.5 yuan.
But refining giant Sinopec dropped 0.3 per cent to 6.1 yuan, and PetroChina lost 0.4 per cent to 7.71 yuan.
The drop in the oil sector came as world equity markets slipped on the potential impact on oil prices after Arab states, including the world’s biggest crude oil exporter Saudi Arabia, said they would cut diplomatic ties with Qatar for allegedly supporting terrorism.
With additional reporting by Karen Yeung