Hong Kong blue chips jumped 1.5 percent on Wednesday as shares in the city's property developers struck a peak on growing optimism of a US rate cut, while energy shares surged after crude prices set a record close.
Ports-to-telecoms conglomerate Hutchison Whampoa Ltd rallied 6.2 percent to HK$80.15 after a newspaper said it planned to sell its loss-making Italian 3G mobile operating arm, 3 Italia.
"This just reflects how pleased people would be if it sold 3G, which was a drag," said Andrew Sullivan, sales trading director at Daiwa Securities. "It's had to sell other assets just to make its earnings look good." The benchmark Hang Seng Index closed up 357.90 points at a record closing high of 24,310.14, having struck an intraday high of 24,329.20.
"24,000 is a good base for us; 24,200 is a bit high, but I think people will get cautious towards the end of the week," Sullivan said, noting that US retail sales were due on Friday. China plays underperformed, with the China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, gaining 0.8 percent to 14,450.48.
Mainboard turnover was HK$97.5 billion (US $12.5 billion), up from to Tuesday's HK$91.3 billion. The Hang Seng property sub-index hit a life high of 30,297.07 before ending up 5.3 percent at 30,081.47. Hong Kong real estate developers are sensitive to US interest rates because the city's rate cycle tends to track that of the US due to its currency peg to the US dollar.
Federal Reserve Chairman Ben Bernanke said nothing in a speech in Berlin overnight to change hopes for an interest rate cut at the Fed's rate decision meeting on September 18. Sun Hung Kai Properties, the day's blue chip leader, raced up 7.1 percent to HK$116.70, having earlier hit a life high. Hang Lung Properties advanced 6.5 percent to HK$31.95.
Property developer Cheung Kong, which derives the bulk of its earnings from sister company Hutchison, vaulted nearly 4 percent to HK$119. Mobile handset maker Foxconn International Holdings tumbled nearly 4 percent to HK$19.46 in heavy trade after its earnings surprised on the downside.
Offshore oil specialist CNOOC Ltd hit a life high before settling up 4.6 percent at HK$10.24. The country's top oil producer, PetroChina Co Ltd, the most active stock after Hutchison, advanced 1.6 percent to HK$11.36.