Hong Kong stocks rise to one-week high, boosted by Chinese insurer Ping An
Other insurers are also up while Tencent – biggest contributor to the Hang Seng Index – adds 67 points to the benchmark
Hong Kong stocks rose to its highest level in over a week on Wednesday, led by China’s second-biggest insurer Ping An Insurance (Group), which had posted better-than-expected earnings.
The Hang Seng Index gained 0.6 per cent, or 174.79 points, at 27,927.58, marking its highest level at the close since August 13. The Hang Seng China Enterprises Index also rose 1.1 per cent, or 112.54 points, to 10,850.17.
“Ping An results helped boost the market. The Hang Seng Index may find resistance at the 28,000 level,” said Phillip Capital Management director Louis Wong Wai-kit.
Ping An soared as much as 5 per cent earlier in the day before closing up 3.5 per cent to HK$72.80 as the second-best performing blue chip. Credit Suisse raised the target price to HK$99 from HK$98 after sales and improved efficiency from the development of new technologies drove first-half net profit to rise 34 per cent on the year to 58.095 billion yuan (US$8.49 billion).
Among other insurers, AIA Group added 0.5 per cent to HK$68.65 and China Life Insurance rose 1 per cent to HK$18.82. Hong Kong Exchanges and Clearing was 1.1 per cent higher at HK$223.80.
Internet giant Tencent Holdings rose 2.5 per cent to HK$359.40. The stock, the biggest contributor to the Hang Seng Index, added 67 points to the benchmark.
Geely Automobile Holdings rose 1 per cent to HK$16.54 after announcing an interim net profit that jumped 53.6 per cent year-on-year to 6.67 billion yuan, slightly beating market projections of a 50 per cent rise.
Shares in AAC Technologies Holdings however fell as much as 10 .6 per cent before paring losses to close 1.3 per cent higher at HK$88.35. The Apple components supplier said net profit fell 38.7 per cent in the second quarter from a year earlier to 653 million yuan, missing the median forecast of 1.09 billion yuan in a Bloomberg survey because of a slowing global smartphone market.
Hengan International Group, the mainland Chinese tissue and sanitary towels maker, slipped 2.1 per cent to HK$65.50 after it warned that its gross profit margin will come under pressure in the second half of the year as higher wood pulp price, against depreciating yuan, will raise production costs. The company was the second-worst blue chip performer.
China’s onshore yuan, traded on the mainland, rose for a fifth straight day to 6.8455 against the US dollar after the central bank raised the daily yuan reference rate higher, an indication of a stabilising market as the mainland and US resume trade talks this week.
But analysts were sceptical on how sustainable a stabilised yuan will be.
“It's becoming apparent to the market that the US needs to fight China now before it gets too late. Business models are being changed because the trade war is not expected to end in six months time,” said John Tan Ming-kiu, regional head of financial markets at Standard Chartered Bank.
Mainland stocks slipped with the Shanghai Composite Index falling 0.7 per cent, or 19.22 points, to 2,714.61 while the CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – decreased 0.6 per cent, or 18.69 points, to 3,307.96.
The Shenzhen Composite Index fell 1.1 per cent, or 16.76 points, to 1,454.52 while the Nasdaq-style ChiNext dropped 1.2 per cent, or 17.42 points, to 1,439.55.