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October 16, 2009

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HK stocks rally for three days

HONG Kong stocks stretched a rally into a third day yesterday with a 0.5 percent advance, driving the key index above 22,000 points for most of the session before profit-taking nudged it off that level.

Banks, property and export-related stocks charged ahead, fueled by ample liquidity from investments exiting the falling United States dollar, before pulling back as traders took profit.

"It was very good in the morning, then profit-taking pressure began pushing prices down. Nobody was surprised, it had to start somewhere after the market accumulated so much gains," Jackson Wong, Tanrich Securities investment manager, said in Hong Kong.

Daniel Chan, senior investment strategist at DBS Bank in Hong Kong, said the market was being "driven more by liquidity than fundamentals."

"Some traders have begun taking profit, and downside pressure is now greater than the upside," Chan said.

The benchmark Hang Seng Index, which closed at a 14-month high on Wednesday, advanced a further 112.60 points to settle at 21,999.08, its highest closing level since August 7, 2008.

Turnover swelled to nearly HK$80 billion (US$10.6 billion) from Wednesday's HK$64.6 billion. Index heavyweight HSBC Holdings rose 1.3 percent. The Bank of China gained 1.81 percent, and China Construction Bank added 1.49 percent.

The China Enterprises Index of top locally listed Chinese mainland companies was up 0.64 percent at 12,859.71, off a high of 13,046.07.

Property stocks lost early gains amid warnings of a bubble forming in the sector. Cheung Kong ended only 0.3 percent firmer, but Sun Hung Kai lost 1.01 percent.


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