Hong Kong stocks rallied 1.6 percent to close at fresh six-year peaks on Thursday, fuelled by a record high in the Dow Jones industrial average, with market heavyweight HSBC Holdings hitting an all-time peak. Most property stocks also gained on hopes that the US Federal Reserve would not raise interest rates any time soon.
The benchmark Hang Seng index added 278.46 points to close at 17,907.67, a level unseen since July 2000. Volume stood at HK$43.4 billion (US $5.6 billion), the year's eighth highest. "The market is quite bullish," said Yuihama Hirokazu, Asia strategist at Daiwa Institute of Research. "I expect the region to rally through the beginning of next year and I think Hong Kong could reach historical highs by year-end." But with the market facing tough resistance at 18,000 and some analysts questioning the quality of buying, near-term consolidation loomed.
"Sentiment would not turn bearish so soon, but turnover is huge, yet we're not seeing buying across the board. Turnover is concentrated in a few counters which means there's a lot of short-term speculators and not all the funds are buying," said Alex Wong, director at Shenyin Wanguo Asset Management.
"We're vulnerable to a short-term consolidation." Fed chief Ben Bernanke said overnight the central bank would watch to see how much a "substantial correction" in the housing market would slow economic growth. This, plus a weaker-than-expected services report, reinforced views that the Fed would not have to raise rates soon. Global lender HSBC tapped a record high of HK$145.4 before easing to HK$145.2 for a 2.4 percent gain.
China Mobile Ltd, the world's largest cellular carrier by subscribers, ended up 2.1 percent at HK$58.2. Sun Hung Kai Properties rose 2.4 percent to HK$86.8 and Cheung Kong climbed 1.6 percent to HK$84.3. Cheung Kong, Hong Kong Land and Keppel Land said on Thursday that they planned to spend about S$2 billion ($1.26 billion) on the development of Singapore's new waterfront financial district.
Recently listed shares also saw follow-through buying, with Chinese property developer Shui On Land soaring 6.8 percent to HK$6.30, a day after it chalked up 10 percent in its Hong Kong debut. Fertiliser maker China BlueChemical Ltd, which listed last Friday, rose 1.7 percent to HK$2.46 in active trade. But newcomer China Merchants Bank fell 2.2 percent to HK$11.62 on profit-taking following a five-session gaining streak.
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