Hong Kong stocks rose 0.51 per cent on Tuesday as US lawmakers inched closer to a deal to reopen the government and raising the country’s borrowing limit to head off a devastating debt default.
The benchmark Hang Seng Index added 118.20 points to finish at 23,336.52 on turnover of HK$57.73 billion (US$7.45 billion).
The gains were in line with a broad regional rally on hopes a budget agreement will be found just days before an October 17 deadline, when the government runs out of cash to pay its bills and service its debts.
Most fund managers appear to be more frightened of being left behind if the market (surges) than of the apocalyptic scenario of failing to fix the debt ceiling on time
After weeks of bickering Republicans and Democrats said they were close to ending a stand-off that has shut the government for two weeks, costing the government billions of dollars.
CLSA equity strategist Nicholas Smith said: “Most fund managers appear to be more frightened of being left behind if the market (surges) than of the apocalyptic scenario of failing to fix the debt ceiling on time.”
Chinese rail stocks rose after Chinese Premier Li Keqiang touted the sector in Thailand. CSR Corp. rose 5.3 per cent to HK$5.78 and China Railway Construction Corporation jumped 3.6 percent to HK$8.46.
Li’s decision to discuss the sector “even during a foreign visit showed the government considered the development of (high-speed rail) very important,” said Gary Wong, an analyst at Guotai Junan in Hong Kong.