Hang Seng cheers China's olive branch

Business | Tereza Cai and Stella Zhai 12 Sep 2019

Hong Kong stocks closed at their highest since early August yesterday, boosted by property and financial firms, while China's move to exempt some US goods from retaliatory tariffs boosted market sentiment.

The benchmark Hang Seng Index surged 475 points to 27,159, the highest since August 2, as daily turnover in the market amounted to HK$89.5 billion.

A pause in protests also seemed to help boost sentiment. Hong Kong activists called off protests yesterday in remembrance of the September. 11, 2001, attacks on the United States and denounced a Chinese state newspaper report that they were planning "massive terror" in the city.

Banking sector rallied as The Hongkong and Shanghai Banking Corporation raised its mortgage rate after US government-bond prices fell and yields increased.

HSBC (0005) soared 3.14 percent to HK$60.75 while Hang Seng Bank (0011) was the top gainer among blue chips with a 4.56 percent jump at HK$179. BOC Hong Kong (2388) also rose 3.66 percent to HK$28.30.

Local property stocks saw a surge with Sun Hung Kai Properties (0016), Hang Lung Properties (0101), and Henderson Land Development (0012) all jumping more than 3 percent.

Wharf Real Estate Investment (1997) added 4.56 percent to HK$45.90.

The surge in the property sector came following reports that tat Chief Executive Carrie Lam Cheng Yuet-ngor had remained neutral amid calls to invoke the Lands Resumption Ordinance, to increase land supply for public housing.

Another top gainer among H-shares was China Shenhua Energy (1088) up 3.91 percent.

The three biggest H-shares percentage decliners were mainland clothing maker Shenzhou International (2313), which was down 2.26 percent, Sino Biopharmaceutical (1177), which fell 1.65 percent, and CSPC Pharmaceutical (1093), which was down 1.55 percent.

Meanwhile, Kingston Securities executive director of research Dickie Wong said the Hong Kong Exchanges and Clearing's (0388) bid for the London Stock Exchange might help improve market sentiment, and he expected the benchmark to test 27,300 today.

In other news, the offshore yuan was quoted at 7.1179 per US dollar, 137 basis points weaker than the previous close.

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