Friday, 17 July 2015 17:14
HONG KONG: Stocks in Hong Kong ended 1.00 percent higher Friday, following a surge in Shanghai as fears over a renewed rout on mainland markets subside, while Greece’s bailout deal with creditors this week has also lifted confidence.
The benchmark Hang Seng Index added 252.49 points to 25,415.27 on turnover of HK$ 95.10 billion (US$ 12.27 billion).
Shanghai closed up 3.51 percent Friday and ended the week more than two percent higher. However, it is still down more than 23 percent from its June 12 high.
Dealers tracked Chinese markets, which ended a second straight week in positive territory, buoyed by Beijing’s moves last week to prevent a meltdown after Shanghai slumped more than 30 percent between June 12 and July 8, wiping trillions off valuations.
Easing fears about Greece provided a buying opportunity as the country agreed to a strict batch of bailout proposals that keeps it in the eurozone. The European Central Bank extended emergency funds allowing the country’s banks to reopen after three weeks.
Also, the European Commission, the bloc’s executive arm, gave the green light to a multi-billion-euro bridging loan.
“We’re not saying the situation in Greece is totally resolved, but at least there is some calm now,” Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management Ltd., told Bloomberg TV.
The big winners on the HSI were Tencent, which rose 2.40 percent to HK$ 153.60 while CK Hutchison Holdings climbed 2.68 percent to HK$ 115.10. HSBC added 0.57 percent to HK$ 70.30, insurer Ping An put on 1.73 percent to HK$ 97.05 and casino operator Sands China gained 1.74 percent to HK$ 32.15.
– Reduced volatility –
In Shanghai the composite index rose 134.17 points to 3,957.35 on turnover of 593.1 billion yuan ($ 96.9 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange and also hammered in the sell-off, surged 4.98 percent, or 103.90 points, to 2,190.42 on turnover of 507.9 billion yuan. It gained 7.62 percent for the week.
“The market is still rebounding from earlier plunges, even though the recovery progress has seen some pullback along the way,” Northeast Securities analyst Shen Zhengyang told AFP.
“With more state funds in the market being invested by professional investors, market volatility will likely be reduced,” he said.
Media reports on Friday said the state-backed China Securities Finance Corp., tasked with restoring stability to the stock market, is amassing 2.0-3.0 trillion yuan in funds from financial institutions including commercial banks — marking the latest move by the government to avert a month-long rout.
“We seem to be experiencing a noticeable change in sentiment with investors seeing that the actions from the authorities did manage to support the market,” Gerry Alfonso, a Shanghai-based trader at Shenwan Hongyuan Group, told Bloomberg News.
“The recovery of the market seems to continue with investors returning to their pre-correction strategies.”
Chinese railway construction companies were among the biggest winners on Friday. China Railway Erju surged by its 10 percent daily limit to 14.51 yuan while China Railway Construction jumped 4.05 percent to 18.25 yuan.
Securities firms were also higher. Shanghai-listed Citic Securities added 3.68 percent to 25.38 yuan and Shenzhen-listed Shanxi Securities soared by its 10 percent daily limit to 16.47 yuan.
