Hong Kong shares advanced 5.5 percent on Monday in huge turnover, sending the main index to its highest level since mid-October 2008, as data from China and the US suggested the global economy was on the mend. Coal and steel stocks rallied strongly after China's official (PMI) for April rose for a fifth straight month, The country would make an early recovery from the global economic slump.
Turnover soared to a four-month high of HK$80.3 billion compared with Thursday's HK$70.9 billion. The benchmark Hang Seng Index ended 860.06 points higher at 16,381.05, after grazing 16,387.12, its highest level since October 15, 2008, earlier in the session. The index also topped 16,000 points for the first time this year on Monday, and the convincing break has investors betting on a greater upside for the market as shorts squeezes will be triggered if the rally is sustained.
The world's largest contract manufacturer of mobile phone handsets, Foxconn International Holdings tacked on another 17.8 percent to Friday's 19 percent rally after a landmark cross-strait telecom deal was struck between China Mobile and Taiwanese Far EasTone Consumer goods exporter Li & Fung Ltd jumped 10.8 percent to HK$24.00, building on last week's gains, after the company said it expected to sign more outsourcing deals within months as cash-strapped retailers in the United States looked to cut costs in the economic downturn.
The outsourcing deals in 2009 could be similar in size to the one the company signed with fashion retailer Liz Claiborne Inc in February, Li & Fung President Bruce Rockowitz told Reuters in an interview last Tuesday. The China Enterprises Index of top mainland companies was up 6.1 percent at 9,641.91, tracking a 3.3 percent rally on the Shanghai Composite Index, which closed at a nine-month high on Monday.
China property stocks soared after Guangzhou R&F Properties said its contracted sales in April jumped 80 percent from a year earlier to 2.34 billion yuan ($343 million) and it was confident of achieving its interim sales target. The Chinese real estate developer said contracted sales in the first four months totalled 8.3 billion yuan. It gave no comparison figures.
The company had set a sales target of 22 billion yuan for 2009 and about 10 billion yuan for mid-year. Shares in Guangzhou R&F were up 12.6 percent, while China Overseas Land advanced 9.4 percent.
Metal stocks jumped on the improved PMI data with Angang Steel advancing 16.2 percent, while Aluminium Corp of China added 9.8 percent China Shenhua Energy climbed 11.6 percent, while Yanzhou Coal gained 15.4 percent. Market talk that coal miners may soon succeed in wrangling higher contract prices from power producers, after protracted negotiations, also fuelled gains on Monday, said brokers.
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