Hang Seng index closes at four-month high, mainland China markets also gain

Hong Kong’s main stock index closed at a four month high on Thursday while mainland Chinese shares saw their highest closing in two months on rallies in the industrial and construction materials sectors, and after the Nasdaq Composite Index saw its record high close on Wednesday night, driven by a tech rally.

The Hang Seng Index closed up 0.17 per cent or points at 23,525.14 while the Hang Seng China Enterprises Index advanced 1.2 per cent, its highest level since November 2015, to 10,075.17 at the close on Thursday.

Belle International led gains on the Hong Kong bourse, rising 5.33 per cent to HK$5.34 at the close.

Construction stocks and industrial shares gained ground on news of mainland authorities’ supply-side reforms.

Hong Kong’s main television broadcaster TVB jumped as much as 6 per cent in early morning trade, but soon gave up much of its gains and traded at HK$30.3 at noon, up 2.2 per cent. The company said Wednesday night that it received “a conditional cash partial offer” from TLG Movie & Entertainment Group to buy a 29.9 per cent stake. But TVB also said there’s “no certainty the plan will materialise into a credible offer”.

The Hong Kong broadcaster closed up 3.2 per cent at HK$30.6 after a volatile day of trading on Thursday.

“We could expect to see Hong Kong stocks fluctuate a little bit on Friday, as there has long been capital from the mainland waiting to invest in the equity markets, which could cheer the market,” said Kingston Lin King-ham, director at AMTD securities brokerage.

Positive signs on the mainland recently, including news that the government signalled it would reduce overcapacity in the construction materials sector, could see mainland Chinese stocks rise slightly on Friday, Lin said.

Local rival to Hong Kong’s TVB, I-Cable Communications, reversed early gains to drop 1 per cent to 99 Hong Kong cents by the lunch hour break. It closed flat at HK$1.

Hong Kong Exchanges & Clearing also closed flat but at one stage was up 1.1 per cent to HK$197.7 during morning trading. This followed a 5 per cent rally in HKEX on Wednesday, after expectations the launch date of a Bond Connect programme, which would give overseas investors access to China’s onshore bond markets, may be announced by Chinese regulators this week.

A spokeswoman for Hong Kong Exchanges & Clearing, responding to a request from South China Morning Post, noted the rise in the HKEX share price but was not aware of any reason for it, adding that the bourse operator won’t comment on market speculation.

Separately, Hang Lung Properties declined 2.7 per cent to HK$19.16 after Goldman Sachs downgraded its rating on the stock.

On the mainland, the Shanghai Composite ended up 0.51 per cent or 16.20 points to 3,183.18, its highest level in two months. The large-cap CSI300 index added 0.38 per cent to close at 3,396.29.

All three major stock indices on the Shenzhen Stock Exchange gained. The Shenzhen Component Index added 0.52 per cent to close at 10,182, the Shenzhen Composite rose 0.66 per cent to 1,954.62, and the Nasdaq-style ChiNext Index added 0.55 per cent to finish at 1,914.08.

Zijin Mining Group gained 0.85 per cent to 3.58 yuan in Shanghai at the close and Zhongjin Gold added 0.23 per cent to 12.80 yuan.

Overnight, US stocks were mixed. The Nasdaq gained 0.2 per cent to end at 2,682.45 – an all time high – while the S&P 500 added 0.1 per cent to settle at 2,294.67.

However, the Dow Jones Industrial Average dropped 0.2 per cent to 20,054.34, led by declines in financial stocks. JP Morgan and Goldman Sachs retreated 0.9 per cent and 0.8 per cent respectively.

Oil prices settled higher, as March WTI crude futures added 0.3 per cent to close at US$52.34 a barrel, and April Brent crude ticked up 0.1 per cent to US$55.12 a barrel.

With additional reporting from Enoch Yiu