Hong Kong stocks closed at an 18-month high on Wednesday, breaking above 24,100 points, due to the inflow of capital into Chinese bank stocks as well as internet giant Tencent.
The benchmark Hang Seng Index increased 0.47 percent, or 112.83 points, to 24,107.70 at 4 p.m., the highest since August 2015 and the first time to close above 24,000 since September 2016. The Hang Seng China Enterprises Index, which tracks the performance of mainland China enterprises, advanced 0.18 percent, or 18.89 points, to 10,455.02 today.
Chinese banks led the turnover on Wednesday’s market, contributing to the increase of the financial sub-index by 0.69 percent. China Construction Bank (CCB) rose 2.87 percent to HK$ 6.45 with turnover reaching HK$5.8 billion, followed by the Bank of Communications (BANKCOMM), advancing 1.62 percent to HK$6.28, the Bank of China (BOC), going up 1.51 percent to HK$4.03 and the Industrial and Commercial Bank of China (ICBC), climbing 0.59 percent to HK$5.13.
Chinese internet giant Tencent increased 2.61 percent to HK$212 with the largest turnover of the day at HK$6.5 billion, the major force boosting the information technology industry by 1.84 percent, along with bank stocks’ surge after a recent Morgan Stanley analysis showing less concern about China’s loans and debt.
Total turnover gained on Wednesday reached HK$107.6 billion, almost double the daily turnover in January, according to the South China Morning Post. Kingston Lin King-ham, director at securities brokerage AMTD, told the South China Morning Post that Hong Kong shares were rising as improving global growth fueled investor optimism in the past two days. “Money continues to come in, and the growth sentiment will stay for a while,” he said.
All three major US indexes climbed to record highs the night before as investors expected US economic growth based on the plans to cut tax and raise interest rates.
The Hang Seng Index has risen 31.6 percent from a five-year low set on 12 February, 2016, due to the decrease of oil prices and the downturn in world economy.
The outlook on Hong Kong stocks was improving, and the enthusiasm would likely continue for a while, Rober Di, founder of hedge fund manager RPower Capital, said to Reuters, though the index may go back and force following the global market.