Hong Kong stocks rebounded 0.78 percent on Thursday, ending a four-day losing streak, to close at their highest level in three weeks. Mainland financial shares including China Construction Bank Corp again propelled the Hong Kong-listed mainland H shares, leading them to their seventh day of consecutive gain.
The benchmark Hang Seng index rose 122.56 points to finish at 15,865.22. The China Enterprises index of H-shares jumped 1.38 percent to 6,574.89. Turnover was HK$27.9 billion (US $3.6 billion), up nearly a third from Wednesday's HK$21.3 billion.
"One reason for the day's rally is the settlement of the Hang Seng index futures," said Louie Shum, managing director at Sincere Securities Ltd "Some investors prefer the market higher for a better settlement price."
Though the US Federal Reserve was set to finish its two-day policy meeting later in the day, investors were ready to return to the market, having digested the prospect of a rate increase. "People believe the interest rate hike is already in the price," said Andrew Clarke, a trader at SG Securities, adding that reports have surfaced saying Hong Kong banks would not follow the US rate rise.
Mainland financial shares accelerated, as lenders derived strength from the strong response to Bank of China's mainland initial public offering and insurers benefited from expectations of more positive policy changes allowing them to provide cross-industry financial services. China Construction Bank, the day's second most active stock, climbed 2.2 percent to HK$3.525 and Bank of China edged up 0.73 percent to HK$3.45.
China Life Insurance Co Ltd rose 1.3 percent to HK$11.90 and rival Ping An Insurance jumped three percent to HK$22.60 after saying on Wednesday it had won regulatory approval to set up an asset management unit in Hong Kong. Hong Kong properties recovered, as the Hang Seng property sub-index rose 1.14 percent to 18,877.32 after falling for four straight sessions.
Henderson Land Co Ltd gained 1.6 percent to HK$39.35. Cheung Kong (Holdings) Ltd rose nearly 1 percent to HK$81.15. Lenovo Group Ltd was one of the few blue chip decliners, slumping 2.9 percent to HK$2.55 after the world's third-largest PC maker said growth of the global computer market could slow this year from 2005.
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