Hong Kong share prices closed 2.02 percent higher on Wednesday, as investors grabbed bargains in property firms after a heavy fall in the previous session, dealers said. The benchmark Hang Seng Index closed up 353.78 points at 17,892.15. Turnover was low at 56.71 billion Hong Kong dollars (7.27 billion US).
Property firms were boosted by expectations that the US Federal Reserve, which completes a two-day meeting later Wednesday, will leave interest rates at historic lows for some time. New World Development surged 5.9 percent to 13.36 dollars after dropping 3.8 percent Tuesday.
Sun Hung Kai Properties was up 3.4 percent at 92.15 dollars and Sino Land rose 3.7 percent to 12.50. Because of the Hong Kong dollar's peg to the US dollar, local monetary policy is tied to that of the US. Despite the rise, dealers said the market had outpaced fundamentals and they expected a pullback in the near term, though abundant liquidity will offer support at 16,500.
"Apparently, it's more a bear rebound than a sign of any change in fundamentals. I think it's just the calm before the storm," said Peter Lai, sales director at DBS Vickers, according to Dow Jones Newswires. China's two biggest life insurers rose after Goldman Sachs raised its target prices on the firms, citing strong fundamentals. China Life Insurance rose 1.5 percent to 27.95 dollars and Ping An gained 3.5 percent to 52.70.
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