Hong Kong blue chips jumped nearly 5 percent on Wednesday, boosted by Wall Street gains, as China Mobile surged after the wireless operator said it is talking to Apple Inc about offering iPhones in China.
Hong Kong-listed China plays bolted 6.8 percent, with Sinopec Corp rallying up to 12 percent on expectations easing crude prices will widen the refiner's margins. HSBC Holdings plc underperformed ahead of its third-quarter results for its US unit, whose exposure to the US mortgage crisis could result in another big hit.
The market's momentum accelerated in the afternoon as Shanghai's stock market rebounded sharply. Shares marked their best single-day percentage gain since August 20, when Beijing said mainland citizens could invest directly in Hong Kong stocks, a programme which is now expected to be delayed.
The benchmark Hang Seng Index closed up 1,362.66 points to end at 29,166.01 on mainboard turnover of HK$149.1 billion (US $19.1 billion), off Tuesday's HK$154.7 billion. The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, gained 1,142.05 points to 17,837.13.
"We're seeing a strong rebound. Some of it is short-covering but undoubtedly, most of it is Wall Street," said Howard Gorges, vice chairman of South China Brokerage. "There are still uncertainties, but markets now have a better handle of the extent of the problems banks face over subprime." China Mobile, the day's most active stock, led the blue chips' rebound, rallying 9.2 percent to HK$140.80.
Sinopec also traded heavily, ramping up 10.3 percent to HK$11.62. Top oil producer PetroChina Co Ltd, which also has a refinery business, shot up 7.1 percent to HK$15.74.
HSBC trailed the broad market, ending the day up 1.2 percent to HK$139. Bourse operator Hong Kong Exchanges and Clearing vaulted 5.5 percent to HK$239, as the market outlook brightened after Wall Street bounced back. Asia's largest listed exchange on Wednesday said reported its third-quarter earnings tripled from a year ago. Dry bulk shipping plays rallied after the Baltic Dry Index, an indicator for commodity-freight, hit a record high.
China COSCO scurried up 14.8 percent to HK$32.15 and Pacific Basin Shipping notched up 6.5 percent to HK$16.64. Top Chinese e-commerce firm Alibaba.com Ltd bolted 10.8 percent to HK$30.25 to reverse a four-session decline. Li & Fung surged 7.6 percent to HK$32, following surprisingly strong earnings results by its key customer Wal-Mart Stores Inc.
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