HONG KONG: The Hong Kong and mainland China stock markets rose in early trade on Monday amid expectations Beijing may introduce fresh stimulative polices before the Lunar New Year, hopes for more monetary easing in Europe and a bounce back in oil price that pushed global markets up.
The Hang Seng Index was up 1.83 per cent or 349.51 points at 19,430.02 at the midday close. The China Enterprises Index, also known as the H-share index, which tracks Hong Kong-listed mainland companies, was up 1.33 per cent or 107.91 points at 8,212.89.
The Shanghai Composite Index was up 1.03 per cent, or 30.02 points at 2,946.58 point at the midday close, while the The CSI 300 Index of large-cap stocks in Shanghai and Shenzhen closed the morning session at 3,139.61, up 0.84 per cent or 26.15 points.
The Shenzhen Composite Index was up 1.62 per cent, or 29.69 points at 1,857.03 at the midday close, while the Nasdaq-style ChiNext Price Index gained 1.21 per cent, or 25.90 points to 2,175.49.
Ben Kwong Man-bun, a director of KGI Asia, said the bounce back in oil prices and expectations Beijing might launch additional stimulus before the Lunar New Year had boosted the stock market, along with hints fo further monetary easing by the European and Japanese central banks.
“Both the Hong Kong and China stock markets will stabilise this week,” he said. “The oil stocks are benefiting the most from the bounce in oil prices. However, investors still seem very cautious, fearing the rally may not go too far.”
Oil stocks led Monday’s rally, with the sector on average rising 2.23 per cent. CNOOC rose 5.76 per cent to trade at HK$7.34 at midday, PetroChina was up 4.66 per cent to HK$4.72 and Kunlun Energy rose 2.44 per cent to trade at HK$5.46.
Insurance and financial stocks also rose. AIA rose 2.27 per cent to close the morning session at HK$42.75 and HSBC rose 2.17 per cent to HK$54.
Asian markets opened higher on Monday morning after the US and European markets bounced back on Friday due to a sharp rise in crude oil prices. They were also boosted by the European Central Bank which hinted late on Thursday that more monetary easing would be needed to address bearish sentiment. Japan is expected to indicate this week that it is considering a similar course of action.
The US Federal Reserve will have a meeting on Wednesday but markets do not expect more interest rate rises in the near term.
Japan’s Nikkei 225 rose 1 per cent or 170.180 points by midday to 17,128.71, while Korea’s benchmark index rose 0.92 per cent to 1,896.73. The key index in Australia rose 1.47 per cent to 5,042.800.
America’s Dow Jones Industrial Average Index rose 1.33 per cent or 210.83 points on Friday to climb back to 16,093.51, while the S&P 500 closed 2.03 per cent higher at 1,906.90, and the Nasdaq rose 2.66 per cent to close at 4,591.18.
The Hang Seng Index bounced back 539 points, or 2.9 per cent on Friday to close at 19,080 after the Hong Kong dollar strengthened.
It hit a three-year low on Wednesday and the local currency dropped to an eight-and-a-half-year low due to speculators’ attacks on the peg amid worries over China’s economic slowdown.
Hong Kong stocks’ American Depository Receipts (ADRs) closed higher in the US market on Friday. After conversion into Hong Kong dollars, HSBC ADRs closed at HK$53.77, up 1.7 per cent from Friday’s Hong Kong close. China Life ADRs closed at HK$19.49, up 2.13 per cent and China Mobile ADRs closed at HK$83.84, up 1.44 per cent.
