Hong Kong, China stocks advance as clearer Federal Reserve signal of lower interest rate buoys investors’ sentiments
- Selective banks and insurers led both the Hang Seng and Shanghai indexes higher Friday
- The gains could be fleeting, as weak June import and export data showed US China trade war began to strain world’s second biggest economy
Benchmark stock indexes of China and Hong rose, buoyed by short-term traders switching their investments back into selective financial stocks, as clearer signals this week from the US Federal Reserve about interest rate cuts lifted sentiments.
The Hang Seng Index rose 0.1 per cent to 28,471.62, while the China Enterprises Index – which tracks the performance of Hong Kong-listed Chinese companies, was little changed at 10,788.34.
In China, the CSI300 Index rose 0.6 per cent to 3,808.73 while the Shanghai Composite Index rose 0.4 per cent to 2,930.55 and the Shenzhen Composite Index closed 0.5 per cent higher at 1,556.77.
Friday’s gains reflected improved sentiments, after US Fed Chairman Jerome Powell provided more hints this week on interest rate cut slated for the Fed meeting end of this month.
“Lower interest rates means more money [to buy properties], which means property prices go up,” said Francis Lun, chief executive of Geo Securities in Hong Kong. “The Fed rate cuts at the end of the month will be a temporary boost in the market, but still the problem is there’s no buying interest … most shares are just [experiencing] rangebound trading.”
Property developers gained in Hong Kong, boosting the Properties Index by 0.4 per cent, its third day of increases. Gains were led by Sino Land, which rose 1.4 per cent to HK$13.38, while Victor Li’s CK Asset Holdings rose 0.8 per cent to HK$60.95.