(Updates to close)
* HSI climbs 1.2 pct, breaks resistance after two days
* H-shares +1.7 pct, CSI300 +0.5 pct, Shanghai Comp +0.4 pct
* China banks lead charge, some commods strong too
* China property weak on Longfor's fundraising plans
By Clement Tan
HONG KONG, Sept 19 (Reuters) - Hong Kong shares rose 1.2 percent, helped by Chinese banks that lifted the Hang Seng Index above a chart level that had capped gains since a stimulus-rally in the previous two weeks.
Gains for banking stocks tracked an Asia-wide rally for the sector on Wednesday after the Bank of Japan (BOJ) became the latest major central bank to announce a bigger-than-expected stimulus, spurring hopes that China's central bank will also ease policy.
"With the European Central Bank, the U.S Federal Reserve and now the Bank of Japan -- all the world's major central banks -- moving to ease, there will now be expectations for the PBOC (People's Bank of China) to follow suit," said Jackson Wong, Tanrich Securities' vice-president for equity sales.
Mainland Chinese markets gained for the first time this week, rising from Tuesday closes that were almost two-week lows. The CSI300 Index of the biggest Shanghai and Shenzhen listings rose 0.5 percent. The Shanghai Composite Index gained 0.4 percent in the lightest volume since Aug. 29.
The China Enterprises Index of the top Chinese listings in Hong Kong moved up 1.7 percent.
The Hang Seng Index closed at 20,841.9. Wednesday's gain took it above 20,674.5, the lower end of a gap that opened up between May 4 and 7 and a technical level that stymied gains in the first two sessions this week.
Hong Kong's turnover improved 25 percent from Tuesday, but was still one-third less than during a surge on Sept 7.
In the past two weeks, investors have been cheered by stimulus moves. Stocks were boosted first by China's announcements on Sept. 6 and 7 of infrastructure projects, and then by the Fed's Sept. 13 unveiling of a third round of quantitative easing.
Market watchers said they believe the Hang Seng Index can sustain further gains after the latest Fed move, partly because the Fed is not alone in easing this time round.
This was not the case after the second round of U.S. quantitative easing was announced in early November 2010. Then, the Hang Seng Index rose almost 8 percent in the first week, but still ended down 0.4 percent that month.
BOJ's move on Wednesday came shortly after China's Ministry of Commerce said foreign demand for Chinese goods will likely remain weak. Official data showed a 3.4 percent year-on-year fall in foreign direct investment inflows in the first eight months of 2012, adding to a raft of grim economic data.
With China's growth sluggish and policy action likely subdued ahead of their once-in-decade political transition, Goldman Sachs strategists said in a report on Wednesday that it is still too early to predict a strong rebound in Asian stock markets, which have underperformed developed markets.
CHINA PLAYS IN FOCUS
On Wednesday, shares of China's biggest banks were among the top boosts to the benchmark indices. In Hong Kong, Industrial and Commercial Bank of China (ICBC) rose 2.5 percent to reach its highest close since Aug. 9.
Gold and copper miners were also strong. China's biggest gold miner, Zijin Mining jumped almost 5 percent in Shanghai and nearly 6 percent in Hong Kong. Jiangxi Copper firmed 4 percent in Shanghai and 3.3 percent in Hong Kong.
But the Chinese property sector bucked broader market strength after Longfor Properties said it will issue $400 million worth of new shares at a 7.9 percent discount to its Tuesday close to fund new projects.
Longfor, among China's top 10 developers by sales, suffered its worst day in almost a year, tumbling 8.7 percent and sinking its Chinese property sector peers listed in Hong Kong and mainland China. (Editing by Richard Borsuk)
- Link this
- Share this
- Digg this
- Reprints
China's Economy is on peak these days. Chinese people are very hard-workers and working for their country with loyalty. They have created an example for other countries.
ReplyDeleteChina has captured the world market within a very short period of time. They must be appreciated for their struggle, will power and devotion. China even has beat the USA and japan. All third world countries should learn a lesson from china.
ReplyDelete