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The Hang Seng Index rose 0.1 per cent or 30.79 points to 25,156.34 on Friday. Photo: Reuters

Update | Hang Seng hits 21-month high as brokers upgrade Tencent target

Hong Kong stocks remained robust on Friday, reaching their highest level since July 2015, while mainland markets also gained for a second day

Hong Kong stocks continued to climb on Friday, reaching a new 21-month high as Chinese mainland markets also rose for a second day.

The Hang Seng China Enterprises index added 0.2 per cent or 25 points to close at 10,282.65, while the main Hang Seng Index rose 0.1 per cent or 30.79 points to 25,156.34, the highest closing level since July 2015.

China’s second largest internet giant, Tencent, was the most heavily traded share, climbing 1.4 per cent to close at HK$258.200 ahead of the release of its first quarter results on May 17. Several brokerages including Citibank, JPMorgan and Macquarie raised Tencent’s target price in the past day or so.

However other blue chips were mostly mixed, with Link Reit increasing 1.3 per cent to HK$58.10 and HSBC up 0.2 per cent to HK$68.10, while CKH Holdings dropped 0.3 per cent to HK$101.60 and ICBC was down 0.4 per cent to HK$5.08.

Internet giant Tencent was the most traded stock in Hong Kong on Friday, gaining 1.4 per cent. Photo: Reuters
Apple Supplier AAC Technologies Holdings also fell 3.4 per cent to HK$96 after tumbling 10.5 per cent on Thursday, the biggest drop since May 2010, following a report by short-seller Gotham City Research that questioned the company’s accounting practices.

“Stocks may take a breather with the approach of the next market consensus resistance level of 25,200 points,” said Louis Tse, director of VC Brokerage. “Overall, the outlook still remains positive because of high hopes that A shares will be included in the MSCI index next month.”

Analysts from Ping An Securities agreed that Hong Kong stocks remained attractive given their low valuations and as fading global uncertainties fueled risk appetite.

Analysts said the “Belt and Road Initiative” forum, opening in Beijing on May 14, could further stimulate mainland stocks. The two-day meeting will gather leaders of 28 nations to map out China’s ambitious plans for the trade routes.

Mainland stocks also rose for a second day. The Shanghai Composite Index added 0.7 per cent or 22 points to close at 3,083.51 while the CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – was up 0.9 per cent to 3,385.385.

The Shenzhen Composite Index advanced 1.1 per cent to 1,820.20, the Nasdaq-style ChiNext rose 2.2 per cent to 1,774.63 and the Shenzhen Component Index edged up 0.1 per cent or 11.54 points to 9,787.99.

Overnight, US stocks closed lower amid broad declines, with retail companies leading the losses. The Dow Jones Industrial Average dropped 0.1 per cent or 24.7 points to close at 20,919.4 on Thursday while the S&P 500 closed 0.2 per cent or 13.2 points lower at 6,116. and the Nasdaq Composite decreased 5.2 points, or 0.2 per cent, to 2,394.4.

Shares in Macy’s, for instance, tumbled 17 per cent when the US department-store chain reported a worse-than-expected decline in sales of 6.1 per cent in the first quarter compared with the same period last year.

Most Asian markets eased after previous strong gains, with Tokyo’s Nikkei 225 falling 0.4 per cent or 77.65 points to 19,883.90 and Sydney’s S&P/ASX 200 down 0.7 per cent at 5,870.91.

This article appeared in the South China Morning Post print edition as: Equities continue to firm up on HK, mainland bourses
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