Index heavyweights push Hong Kong stocks slightly higher

Hong Kong stock market edged higher amid light trading on Thursday, driven by a surge in index heavyweights.

The Hang Seng Index closed 0.17 per cent or 36.17 points higher at 21,790.91. The Hang Seng China Enterprises Index added 0.13 per cent or 12.13 to 9,312.76.

The market turnover for Hong Kong’s main board remained around the HK$ 50 billion level, climbing just 2 per cent from the previous day to HK$52.5 billion, much lower than the average of HK$ 70 billion early this month.

Tencent, China’s second largest internet giant, led the gains among 50 HSI companies, rallying to HK$187.6, the highest level in three weeks. It achieved its largest daily gain since November 10, at 2.18 per cent.

Tencent rose 4.35 per cent in two days after announcing it will launch “Little Program” in WeChat on January 9 for the mainland market, a feature that lets users directly access mobile services and applications in-app.

“It seems that some fund managers were [portfolio] window dressing,” said analysts at China Galaxy International in a note, referring to Tencent’s rally.

“We can’t see any specific direction for the benchmarks. The Hang Seng Index is likely to hover around 21,500 to 21,900 [before the new year].”

Chinese banks outperformed on Thursday. ICBC, the world largest bank by assets, advanced 0.88 per cent to close at HK$4.58 and Bank of China climbed 0.29 per cent to HK$3.4, while China Construction Bank, the most heavily traded share in Hong Kong, closed flat after Wednesday’s 4.8 per cent surge.

Insurers were mixed, with AIA Group leading the losses among 50 HSI components, down 1.25 per cent to HK$43.30, while Ping An insurance was up 0.52 per cent to HK$38.7.

Meanwhile, inflows to some extent will support a rebound in the Hong Kong market, said China Investment Securities (HK).

The southbound net inflows through the Shanghai and Shenzhen stock connects have risen to 2.4 billion yuan per day on average over the last six trading days. The net flow was in the opposite direction earlier this month, according to data from the brokerage house.

In the mainland, Shanghai’s Composite Index ended 0.2 per cent lower at 3,096.10 on Thursday.

The CSI 300 Index, which tracks large companies in Shanghai and Shenzhen, lost 0.13 per cent to 3,297.76. The Shenzhen Component Index declined 0.27 per cent to 10,159.45 and the Nasdaq-like ChiNext added 0.11 per cent to 1,959.24.

The losses came despite gains in coal, steel and construction. China Shenhua Energy’s Shanghai-listed shares rose 2.17 per cent to 16.04 yuan. Yanzhou Coal Mining rose 1.41 per cent to 10.78 yuan, while Liuzhou Iron & Steel Co rose 4.33 per cent to 4.82 yuan.

In the bond market, Chinese 5-year treasury bond futures for March delivery surged 0.66 per cent, while the 10-year treasuries for March delivery rose 1.18 per cent. Yield for the 5-year government bond fell 9.74 basis points to 2.83 per cent, while the 10-year treasuries’ yield eased 8.23 basis points to 3.04 per cent.