HONG KONG:Hong Kong shares extended gains on Tuesday after two major U.S. equity indexes closed at record highs following the revival of a U.S.-Mexico trade agreement.
The Hang Seng Index was 0.2% higher at 28,340.20 by noon after rising as high as 28,579.64 points earlier. Heavyweights Tencent Holdings and HSBC Holdings rose 1.2% and 0.6%, respectively. Bank of China added 0.6% ahead of its first-half earnings announcement later on Tuesday. China Construction Bank, also due to report interim earnings on Tuesday, slid 0.4%.
The S&P 500 Index and the technology-heavy Nasdaq Composite closed at record highs overnight after the U.S. and Mexico on Monday agreed to overhaul the North American Free Trade Agreement, a positive sign for investors who have been worried by President Donald Trump’s threats to pull out of the accord since he assumed office. As part of the deal, which will be in force for 16 years, the two nations have agreed to stricter rules for Mexican car exports to the U.S.
Some market participants viewed the agreement as a sign of improvement in an environment dominated by trade tensions between the U.S. and its major trading partners, including China.
The U.S.-Mexico agreement signals there is no deterioration in the climate for global trade, said Louie Shum, chief executive officer at Sincere Securities. “I think this short-term rebound for the Hang Seng Index will continue,” he said.
Shum expects the gauge to find support at 28,200 points.
In the mainland, the Shanghai Composite was little changed in the morning session. The yuan traded onshore edged 0.1% lower against the U.S. dollar, poised to extend Monday’s 0.2% decline. The losses came despite a move by the People’s Bank of China on Friday to resume the use of the so-called “counter-cyclical factor” to keep the currency market stable.
China’s central bank on Tuesday lifted its official reference point for the yuan to 6.8052, firmer than Monday’s fixing of 6.8508 by 0.7%. The magnitude is the biggest strengthening in the daily reference rate in percentage terms since June 1, 2017, according to Reuters.
COSCO Shipping Ports jumped 7.2% in Hong Kong, building on Monday’s 2.4% advance after the port operator posted a 70% surge in first half profit, excluding exceptional items.
ZhongAn Online P&C Insurance slid 5.4% after the company said its net loss for the first half of the year widened to 655.83 million yuan ($96.2 million) from 286.8 million in the year-ago period.
Genting Hong Kong advanced 2.3% after the cruise operator said its net loss for the first half narrowed by 30.7% to $140.1 million as revenue climbed 46%.
