Two cheers for HK share market
Updated: 2007-08-21 10:35
Hong Kong stocks, which ended 1208.5 points higher yesterday after a dramatic 1200-point drop on Friday, are expected to gain further this week as a result of the US government's moves to defuse the subprime mortgage crisis and the foreign exchange authorities' new policy of allowing mainland residents to invest in the market.
After two weeks of stock turmoil, things began to look up for Asian investors yesterday after the US Federal Reserve's intervention to alleviate the global credit crunch.
Hong Kong, which closely tracks Wall Street, did particularly well as blue chips rebounded to rise nearly 6 percent in their best one-day gain since October 1998. Hong Kong-listed mainland players also recorded their best one-day performance in the last seven years with an 8.7 percent jump.
Market watchers labeled it an "auspicious" day for the Hong Kong market as favorable US and mainland policies converged to pump up the shares.
"The market is expected to gain further this week," said Castor Pang, a strategist from Sung Hung Kai Financial Group, a securities consulting firm in Hong Kong.
"We had two pieces of good news today. We heard in the morning that the US central bank had cut its discount rate to prevent a credit squeeze. This in itself was a huge boost for Hong Kong stocks. In the afternoon, the foreign exchange regulator announced it will allow mainland residents to invest in the Hong Kong stock market, a measure that will surely lift stock prices in Hong Kong," said Pang.
Hong Kong-listed shares of mainland companies rose 961.25 points to 11963.77.
Among the benchmark stocks, mainland players led the rally yesterday, with China Life, the country's biggest insurer, soaring 9.4 percent to HK$30.2, making it the day's most-traded stock.
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