Hong Kong stocks climbed to fresh 6-1/2 year closing highs on Tuesday, boosted by the Dow's record finish and ample funds in the market, with China Mobile scaling a new 6-year peak.
The benchmark Hang Seng index ended up 63.56 points at 18,153.41, its highest close since early 2000. The index is 1.3 percent off its all-time peak of 18,397.57 hit in March 2000.
Market participants say the market will next test its record on Friday, amid a global bull market and optimism surrounding the listing of Industrial & Commercial Bank of China after the country's top lender raised a record US $19 billion in its initial public offering.
"There's a lot of cash in the market and the trend is pointing up to 18,400," said Andes Cheng, associate director at South China Brokerage. "The high tide will be this Friday and next Monday and Tuesday because of ICBC," Cheng said. "But this is being fuelled by liquidity rather than fundamentals and the surge in the Nasdaq and Dow.
Most market professionals say the market will set a new high before the year is up. "I'm sure they'll break that (level) over the next few weeks on the back of the US market, which is looking really fantastic," said Khiem Do, head of Asian equities for Baring Asset Management.
"Hong Kong shares are not cheap, but is it trading at Indian multiples? No. There's no bargain anywhere in the world; all the markets have done really well." Top cellular operator China Mobile led the market, rising 1.4 percent to HK$60.0, earlier trading at levels unseen since September 2000.
Fertiliser maker China BlueChemical Ltd jumped 6.7 percent to HK$3.53 amid hopes of an asset injection from its parent, which has acquired a state-owned chemical and fertiliser maker. Asia's top oil refiner Sinopec Corp shot up nearly 3 percent to HK$5.29 on lower crude prices and expectations of solid third-quarter results due later this month. Some analysts said Sinopec's gains could be related to a possible purchase of the chemical- and gas-related assets of China Resources.
Sinopec units Yizheng Chemical Fibre Co Ltd and Shanghai Petrochemical Co Ltd followed their Shanghai-listed shares higher. Yizheng jumped 4.2 percent to HK$1.48 and Shanghai Petrochemical Co Ltd raced up nearly 2 percent to HK$3.39 after announcing plans to compensate shareholders of Shanghai-listed A shares. Turnover was HK$31.1 billion (US $4.0 billion) compared to Monday's HK$33.7 billion.
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