U.S. jobs data lifts markets in Asia

The Hang Seng Index may settle above the 20,000-point level in the coming weeks after Friday's US jobs data sent stock markets soaring across Asia yesterday.

Hong Kong's benchmark index rose 1.7 per cent to a three-month high of 19,998 points, after hitting an intra-day high of 20,091. With China's trade figures for July expected to show signs of improvement, analysts said the HSI may gain another 300 to 600 points in the coming weeks but added the index would encounter strong selling pressure at those levels.

Elsewhere in Asia, stocks rose 1 to 2 per cent. South Korea's Kospi Index rose 2 per cent to a seven-week high on expectations of a rate cut this week, while Japan's Nikkei 225 Stock Average closed 1.6 per cent higher. Even the struggling Shanghai Composite Index gained 1 per cent.

Analysts foresee better market sentiment this month as investors anticipate a long-expected cut in interest rates and the bank reserve requirement ratio (RRR) by Beijing.

'These moves would provide the market a short-term boost but you won't have such announcements every day and the euro-zone debt crisis is yet to be resolved,' said Simon Lam Ka-hang, of Christfund Securities, adding the Hang Seng could at best go up another 300 points before slipping back.

But Castor Pang Wai-sun, of brokerage firm Core Pacific-Yamaichi, was more optimistic. 'The market certainly will not go up a lot, but it is indeed healthier to climb slowly and regress a bit before bouncing back again. The HSI could push 20,600 in the short run.'

He said he expected China to register stronger export growth in July than June as summer has traditionally been a time when trade picks up. Exports rose 11.3 per cent year on year to US$180.21 billion in June, slowing from a 15.3 per cent increase in May.

Forty-six of the 49 HSI constituent stocks rose yesterday. Scandal-stricken HSBC rebounded 2.2 per cent to close at HK$67.05, while BYD rose 6.1 per cent to HK$14 after a government inspection team cleared battery flaws as the cause for a fatal traffic accident in May involving the carmaker's popular E6 electric car.

China High Precision, a manufacturer of industrial automation instruments, surged 17.2 per cent to an intra-day high of HK$1.43 after it clarified allegations from accounting firm KPMG of inconsistencies between the company's turnover and its business transactions. The allegation had sent its shares plummeting 55 per cent on Friday. The stock eventually closed 4.92 per cent higher yesterday.

Spot gold in Hong Kong edged up 0.23 per cent to HK$12,478 per ounce at one point, with the dollar falling to a one-month low against a basket of currencies. Gold shipments from Hong Kong to the mainland fell 10 per cent in June from the previous month to just below 68 tonnes, while gold coming from the mainland to Hong Kong fell 9 per cent to 27 tonnes.

Of the 49 constituent stocks on the Hang Seng index, this many rose yesterday - including HSBC and BYD