Hong Kong stocks surge as banks, insurers lead
Reuters|
Updated: Oct 04, 2017, 12.45 PM IST
HONG KONG: Hong Kong stocks rose on Wednesday, extending gains made in the previous trading session, with Chinese banks and insurers leading the surge after China's central bank cut reserve ratios over the weekend.
The blue chip Hang Seng index rose to 28,521.77, its highest since May 2015, but pulled back to 28,386.32 points by the lunch break, still up 0.76 per cent.
The Hong Kong China Enterprises Index climbed 0.97 per cent at 11,414.92 at midday after it hit 11,514.82, the highest since Augist 2015.
"The momentum that carried forward from the previous trading session gave the market a further boost," said Alex Wong, a director at Ample Finance Group. "Players acted sensibly and calmly this morning after the momentum caught them by surprise previously."
China's central bank on Saturday cut the amount of cash that some banks must hold as reserves for the first time since February 2016 hoping to encourage more lending to struggling smaller firms and energize its lacklustre private sector.
Analysts said the reduction in the reserve requirement ratio (RRR) should support banks' net interest margins and profit growth in 2018, while ensuring that liquidity in the broader economy will remain ample even if Beijing continues its clampdown on riskier forms of financing.
Bank of America Merrill Lynch said the targeted RRR cut was aimed to provide more support to micro and small enterprises, and would benefit more banks than before.
ICBC rose as much as 3.5 per cent to HK$6.48, the highest since June 2015, before paring gains to HK$6.34, still up 1.3 per cent.
Bank of Communications climbed 1.4 per cent, China Construction Bank rose 0.6 per cent and Bank of China gained 0.5 per cent.
Chinese insurers also rose with New China Life rising 2 per cent, Ping An Insurance surging 1.5 per cent, and China Life up 1.3 per cent.
Chinese automakers also jumped with Geely Auto rising 3.9 per cent to a record high, while BYD Company leapt 6.4 per cent heading for the biggest daily per centage gain since Sept. 26.
Chinese markets will be shut all this week for the holiday and will not resume trade until Oct. 9. Hong Kong will close for holidays on Thursday.
The blue chip Hang Seng index rose to 28,521.77, its highest since May 2015, but pulled back to 28,386.32 points by the lunch break, still up 0.76 per cent.
The Hong Kong China Enterprises Index climbed 0.97 per cent at 11,414.92 at midday after it hit 11,514.82, the highest since Augist 2015.
"The momentum that carried forward from the previous trading session gave the market a further boost," said Alex Wong, a director at Ample Finance Group. "Players acted sensibly and calmly this morning after the momentum caught them by surprise previously."
China's central bank on Saturday cut the amount of cash that some banks must hold as reserves for the first time since February 2016 hoping to encourage more lending to struggling smaller firms and energize its lacklustre private sector.
Analysts said the reduction in the reserve requirement ratio (RRR) should support banks' net interest margins and profit growth in 2018, while ensuring that liquidity in the broader economy will remain ample even if Beijing continues its clampdown on riskier forms of financing.
Bank of America Merrill Lynch said the targeted RRR cut was aimed to provide more support to micro and small enterprises, and would benefit more banks than before.
ICBC rose as much as 3.5 per cent to HK$6.48, the highest since June 2015, before paring gains to HK$6.34, still up 1.3 per cent.
Bank of Communications climbed 1.4 per cent, China Construction Bank rose 0.6 per cent and Bank of China gained 0.5 per cent.
Chinese insurers also rose with New China Life rising 2 per cent, Ping An Insurance surging 1.5 per cent, and China Life up 1.3 per cent.
Chinese automakers also jumped with Geely Auto rising 3.9 per cent to a record high, while BYD Company leapt 6.4 per cent heading for the biggest daily per centage gain since Sept. 26.
Chinese markets will be shut all this week for the holiday and will not resume trade until Oct. 9. Hong Kong will close for holidays on Thursday.
