Hong Kong stocks rose on Tuesday as the yuan stabilized and investors expect Beijing to further relax its policies to counter the impact of Sino-US trade frictions. The Hang Seng index rose 0.6 percent, to 27,752.79, while the China Enterprises Index gained 1.0 percent, to 10,737.63 points.
China is likely to cut banks' risk weighting for local government bonds from 20 percent to zero in the near term to attract funding for the bonds, the state-run China Securities Journal reported on Tuesday. The move, if confirmed, would make it easier for local governments to raise money for infrastructure investment. Gao Ting, head of China Strategy, UBS Securities, said Beijing may further ease policies to support economic growth, while preventing the yuan from sliding further amid renewed trade talks with Washington.
The sub-index of the Hang Seng tracking energy shares rose 1.2 percent while the IT sector rose 1.18 percent, the financial sector was 0.44 percent higher and the property sector rose 0.89 percent. The top gainer on Hang Seng was CSPC Pharmaceutical Group Ltd up 9.99 percent, while the biggest loser was CLP Holdings Ltd which was down 3.19 percent.
As of the previous trading session, the Hang Seng index was down 7.76 percent this year, while China's H-share index was down 9.2 percent. As of the previous close, the Hang Seng has declined 3.45 percent this month. The top gainers among H-shares were CSPC Pharmaceutical Group Ltd up 9.99 percent, followed by ZhongAn Online P & C Insurance Co Ltd gaining 9.37 percent and Great Wall Motor Co Ltd up by 6.65 percent.
The three biggest H-shares percentage decliners were China Mobile Ltd which was down 1.34 percent, Hengan International Group Company Ltd which fell 1.1 percent and Postal Savings Bank of China Co Ltd down by 0.8 percent. About 1.75 billion Hang Seng index shares were traded, roughly 103.7 percent of the market's 30-day moving average of 1.69 billion shares a day. The volume traded in the previous trading session was 1.71 billion.
The price-to-earnings ratio of the Hang Seng index was 10.59 as of the last full trading day while the dividend yield was 3.4 percent.
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