Thursday, October 9, 2008

Hong Kong stocks rebound 3.31% on concerted rate cuts

Hong Kong stocks rebounded 3.31 percent Thursday on concerted emergency rate cuts earlier by central banks of major economies, although there were still uncertainties on the market as investors largely remained shy.

The benchmark Hang Seng Index ignored moderate overnight losses on Wall Street to open up 1.08 percent at 15,598.24 on Thursday and gradually widened its gains to 511.51 as it closed at 15,943. 24, just dozens of points away from the 16,000 mark.

The index moved between 15,990.20 and 15,550.86, with market turnover totaling 60.87 billion HK dollars , lower than Wednesday's 77.78 billion HK dollars but not too bad for the current time of turmoil.

Forty of the total 42 blue chip stocks turned out gainers, with heavyweight HSBC Holdings advancing 2.2 HK dollars, or 1.9 percent, at 118 HK dollars, and its local unit Hang Seng Bank surging 3.97 percent to finish at 117.9 HK dollars.

Mainland lender ICBC surged 6.58 percent to 4.05 HK dollars, and China Mobile, another market heavyweight and by far the largest carrier on the mainland, added 2.9 HK dollars, or 4.36 percent, to close at 69.4 HK dollars.

Analysts attributed the gains to the emergency rate cuts announced after the close of Hong Kong market Wednesday by central banks of major economies such as the United States, the United Kingdom, the Eurozone, Canada, Sweden, Switzerland and China.

It was "unprecedented" for the central banks to cut rates together, they said.

The Hong Kong Monetary Authority also followed the U.S. Federal Reserve to cut the base interest by 50 basis points. The actual rate cuts amounted to 150 basis points, as there was also a 100 basis point cut resulting from a methodology change.

But most of the local banks, including the Standard Chartered, chose not to slash their mortgage lending rates because of high interbank lending rates.

The commerce and industry index gained the most among the four major categories with an increase of 3.87 percent, followed by 3. 49 percent for the financial sector. The properties genre ended up1.29 percent and the utilities gained 1.67 percent.

Cheung Kong, the real estate conglomerate headed by "superman" Li Ka-shing, gained 1.31 percent at 73.45 HK dollars. SHK Properties, one of the leading residential developers in Hong Kong, closed up 0.3 percent at 66.2 HK dollars.

Mainland-based lender Bank of China finished up 5.41 percent at2.73 HK dollars. Ping An, the insurance group, added 3.87 percent at 41.6 HK dollars.

China Unicom surged 9.27 percent to 9.9 HK dollars.

Two oil shares also recovered part of the ground lost on the previous day, with PetroChina adding 3.07 percent at 6.37 HK dollars and Sinopec up 7.35 percent at 5.26 HK dollars. CNOOC, the offshore oil producer, remained unchanged at 6.5 HK dollars.

Shipping stock China COSCO was up 0.79 percent at 5.1 HK dollars, but the gain was far less than its 20.06 percent loss on Wednesday.

Source: Xinhua

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