Hong Kong stocks rose by more than 1 percent on Thursday, boosted by a rally in select China plays such as ports and container group COSCO Pacific ahead of the week-long Golden Week holidays.
Investors were also soothed by an easing of world oil prices, which breached US $50 a barrel earlier in the week. Traders said funds also appeared to be window dressing by purchasing select stocks on the last day of the third quarter.
The blue-chip Hang Seng Index ended up 1.31 percent, or 169.23 points to 13,120.03. Volume was a healthy HK$15.42 billion (US $1.97 billion), above recent averages.
The index gained 6.79 percent in the third quarter compared to a 3.12 percent loss in the second quarter this year.
Market watchers see further gains for the Hang Seng in the fourth quarter of the year, traditionally the strongest trading period in Hong Kong. A recent Reuters poll showed traders expect the Hang Seng to end the year at 14,000, led by strong demand for property and banking shares.
Hong Kong markets are closed on Friday for a public holiday.
China enterprise stocks, better known as H-shares, jumped 2.33 percent to 4,649.66 ahead of the Golden Week holiday in mainland China.
Most businesses and government offices shut for the whole week and many people travel outside of their home provinces.
Traders said China plays were also helped by growing comfort that China's economic austerity measures were achieving their goal of reining in strong economic growth and that interest rates hikes may not be needed this year.
Aluminum Corp of China Ltd (Chalco) gained 7.45 percent to HK$5.05, while China's largest listed coal producer Yanzhou Coal rose 3.59 percent to HK$10.10.
But investors expect China plays to remain turbulent.
"Policy decisions remains unconvincing. Until this is clear, the market will likely be very volatile," said Aaron Pong, investment director at Standard Life Investments.
Pong recommends the insurance sector and port operators based on strong growth prospects.
Hong Kong property shares rebounded after several days of losses following strong upward momentum.
Market watchers expect bidding at next month's government land auction to highlight bullish sentiment for the local property market, refuelling property counters.
The Hang Seng property sub index rose 1.63 percent to 16,524.36.
Hong Kong's largest property firm, Sun Hung Kai Properties Ltd, gained 1.38 percent to HK$73.50.
Transport stocks outperformed following recent strong export figures which indicated that an expected slowdown in shipments later this year may not be as sharp as previously thought.
Ports and shipping container group COSCO Pacific Ltd jumped 6.56 percent to HK$13.
Chinese ports operator China Merchants Holdings (International) Co Ltd gained 3.07 percent to HK$11.75.
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