A man walks near an electronic board showing the Hong Kong share index outside a local bank in Hong Kong
Hong Kong led Asian stocks higher yesterday as investors shook off initial pessimism over new measures by China’s market regulator.
KEEPING SCORE: Hong Kong’s Hang Seng jumped 2.1 percent to 27,666.06 and the Shanghai Composite Index in mainland China added 0.9 percent to 4,253.55. Japan’s Nikkei 225 gained 1 percent to 19,837.80 while South Korea’s Kospi was down 0.2 percent at 2,2141.99. Australia’s S&P/ASX 200 climbed 0.6 percent to 5,864.90,
HONG KONG BOUNCE: Hong Kong stocks have yo-yoed as investors continue to evaluate regulatory changes for stock investors as well as monetary loosening measures, both announced by Chinese authorities over the weekend. Mainland investors seeking attractively priced stocks have been piling into the Hong Kong market, which has underperformed compared with Shanghai over the past year. On Sunday the central bank slashed the required reserve ratio for banks by 1 percentage point to stimulate lending into a slowing economy. Separately, the country’s stock regulator said Saturday that new measures to tighten up on some margin financing and encourage short selling were intended to prevent the market’s development and not meant as a crackdown.
MARKET VIEW: Chinese authorities are using the new measures, especially the reserve ratio cut, to “encourage a longer, steadier rally to take place and people are just reacting to that,” said Andrew Sullivan of Haitong Securities. “It does everything that China wants: it takes pressure off the housing bubble, makes people feel better off and it takes money out of the shadow banking system and puts it into stock market.” Kelvin Chan, Markets Writer, Hong KongAP
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