Hong Kong blue chips jumped 1.8 percent on Friday, staying firmly above the key 30,000 level for the first time, with property stocks hitting records, stoked by a weak US dollar and speculation of a rate cut by the Federal Reserve, which meets next week.
Hong Kong conglomerate Hutchison Whampoa also rallied, as investors bid up the underplayed stock to highs unseen since March 2001. Blue chips hardly looked back after easily sailing past the key 30,000-point barrier at the open. Investors switched into Hong Kong blue chips and out of China plays amid expectations that Beijing would raise interest rates following strong macro data a day earlier.
The benchmark Hang Seng Index closed up 550.73 points at 30,405.22, setting an intraday high at 30,562.63 and notching a 3.2 percent gain for the week. The index of Hong Kong-listed mainland companies shook off earlier losses as mainland-listed shares rebounded. The index ended nearly unchanged at 19,548.49 to post a weekly 0.9 percent loss.
Mainboard turnover was HK$157.4 billion (US $20.2 billion) compared to Thursday's HK$165.2 billion. As the US dollar weakened, Hong Kong's central bank sold HK$775 million (US $100 million) worth of the local currency for US dollars to curb a strengthening Hong Kong dollar.
"The market has been very rotational," said William Fong, fund manager at Baring Asset Management. "When the US dollar depreciates, people look for shelter in hard assets. China plays are having a consolidation but in the near-term, I see strong liquidity coming from QDII, so I'm not worried," he said, referring to China's programme allowing qualified financial institutions to invest in overseas-listed securities.
Hutchison was the day's most traded stock after PetroChina Co Ltd, bolting nearly 6 percent to HK$90.75. Property shares resumed their record run, with the Hang Seng property sub-index rising 5 percent to a peak for a second straight day.
Sino Land was the sector's top gainer amid its recent land acquisition spree, rallying nearly 17 percent at one point in heavy trade before settling at HK$24.65, up 12.6 percent. Cheung Kong shot up 5.2 percent to HK$145.5 and MTR Corp, which will have the city's largest land bank pending its merger with KCRC, leapt 6.2 percent to HK$25.75.
Industrial & Commercial Bank of China was a standout among China names, rising 2.1 percent to HK$7.16 a day after it reported a 76 percent rise in third-quarter profit. China's top lender also has agreed to buy 20 percent of Standard Bank Group, South Africa's largest bank.
Merrill Lynch raised its target price for ICBC shares to HK$8.40, and J.P. Morgan raised its target price to HK$8.80. Hutchison Telecommunications International Ltd tumbled 5.7 percent to HK$10.66 after Orascom Telecom Holding was selling up to 143.4 million shares in the emerging markets telecom play at between HK$10.70 to HK$10.95, according to a term sheet seen by Reuters.
PetroChina Co Ltd shed 0.5 percent to HK$19.02, a day after China's top oil producer set an indicative price range for its domestic IPO that was below expectation.
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