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September 30, 2009

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Home » Business » Finance

HK shares rebound as banking stocks rise

HONG Kong shares rebounded from a three-week low yesterday, their biggest one-day percentage gain in more than a week, as investors scooped up shares of oversold stocks, including banks and telecoms, on an overnight rally on the Wall Street.

Brokers said the expiration of futures contracts also boosted heavyweights such as HSBC, as investors with long positions sought to prop up the market.

The benchmark Hang Seng Index rose 2.06 percent, or 424.76 points, to 21,013.17, ending three straight days of losses and posting its biggest one-day percentage rise since September 17. Turnover was HK$49.5 billion (US$6.39 billion), compared with Monday's HK$50.9 billion.

The China Enterprises Index of top locally listed Chinese mainland stocks was up 2.01 percent at 11,988.37.

The Hang Seng Index, which touched a year high two weeks ago, has climbed 14 percent since the start of July.

But steep valuations and an uncertain United States economic outlook could cap the rally in the short term, brokers warned.

"In October, I will be more pessimistic," said Conita Hung, head of equity research for Delta Asia Financial Group. "At this level, it's not attractive for buyers to enter the market. The upside is not much at this level."

Hung predicted the index to trade in a tight range around 21,000.

China's top e-commerce company,, soared 7 percent after it agreed to buy a controlling stake in China Civilink (Cayman) in a deal that could be valued at up to US$79.1 million to expand its customer base.

Blue chips including HSBC and the Industrial and Commercial Bank of China led gains in Hong Kong. HSBC rose 2.6 percent, while ICBC was up 3.3 percent.


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