Hang Seng Index hits nine-month high as Chinese industrial profit report reassures investors mainland recovery is under way

28-Nov-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Hong Kong and mainland China stocks both gained, with the city’s benchmark closing at a nine-month high, as an acceleration in profit growth for industrial companies added to evidence that a recovery in the world’s second-largest economy will be sustainable.

The Hang Seng Index rose 0.3 per cent, or 75.23 points, to 26,894.68 at the close on Friday. The 50-member benchmark eked out gains every day this week to climb 1.7 per cent in the five-day period, as news of positive results from Covid-19 vaccine trials boosted demand for risky assets.

The Shanghai Composite Index gained 1.1 per cent to 3,408.31, the most in almost three weeks.

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Companies whose profits are most dependent on economic growth, such as banks and property developers, paced the gains on the two markets.

Traders remained focused on China’s industrial profit report, even as a technical indicator signalled that Hong Kong’s stocks are overbought and the progress of the Covid-19 vaccine developed by AstraZeneca hit a snag. Profits at industrial companies increased 28 per cent from a year earlier in October, the fastest gain in almost nine years, the statistics bureau said on Friday.

“The overall picture confirms that China is doing better than most and will lead Asia’s recovery into 2021,” said Jeffrey Halley, an analyst at Oanda.

Major markets elsewhere in Asia all closed higher, expect Australia. The US market was shut for the Thanksgiving holiday overnight, and European stocks drifted lower, with the German government calling for the closure of ski resorts in the continent this winter because of rising infections.

Hong Kong reported 92 new coronavirus cases on Friday, the most in more than three month, the Post reported, citing a medical source.

Chinese banks gained as rotational buying of cyclical stocks continued amid optimism about the strength of the economy. Bank of Communications added 4.6 per cent to HK$4.35 in Hong Kong and 2.6 per cent to 4.75 in Shanghai. Industrial and Commercial Bank of China rose 4.3 per cent to HK$4.87 and its Shanghai-traded shares rallied 5.9 per cent to 5.39 yuan.

China Overseas Land & Investment climbed 3.3 per cent to HK$19.40 and China Resources Land rose 2.4 per cent to HK$34.15.

Bosideng International Holdings, China’s biggest maker of down clothing, surged 6.2 per cent to HK$3.41 after saying its first-half profit had climbed 42 per cent from a year earlier.

In mainland China, SAIC Motor jumped 8.5 per cent to 27.08 yuan and Shanghai Zhangjiang High-Tech Park Development shot up by the 10 per cent daily limit to 19.36 yuan. The two companies plan to set up a 7.2 billion yuan (US$1.09 billion) fund to invest in new-energy vehicle projects, according to an exchange statement.

Xinxiang Richful Lube Additive, a maker of lubricant additive, surged 240 per cent from its initial public offering price to 103 yuan on its first day of trading on Shenzhen’s ChiNext board.

https://sg.news.yahoo.com/oil-giants-petrochina-cnooc-lead-031013402.html

 

Category: Hong Kong

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