Hong Kong Market gains on optimism over US-China trade talks

Headline indices of the Hong Kong share market closed higher on Monday, 20 August 2018, as investors chased for bargain hunting on tracking positive finish on Wall Street last Friday and other Asian markets on optimism that the U.S.-China trade talks this week might help resolve an escalating trade war. At closing bell, the Hang Seng Index advanced 384.61 points or 1.41% to 27,598.02. The Hang Seng China Enterprises Index added 118.53 points or 1.13% to 10,632.36. The sub-index of the Hang Seng tracking the Commerce & Industry sector inclined 2.1%, the financial sector was 1.1% up, Utilities sector gained 0.5%, and properties sector rose 1.1%. Turnover decreased to HK$93.7 billion from HK$100.3 billion on Friday.

Shares of HK listed Mainland developers were higher after the China Banking and Insurance Regulatory Commission asked financial institutions to give more support to infrastructure investment, importers and exporters, and to creditworthy companies experiencing temporary problems. The regulator also called on institutions to raise the proportion of medium- and long-term loans to avoid placing strain on borrowers at the end of a month or quarter. Among property developers, China Evergrande Group jumped 4.5% to HK$28, China Resources Land advanced 4% to HK$27.35 and Sunac China Holdings gained 3.3% to HK$23.85. Country Garden Holdings was 2.2% higher at HK$11.34.

 

Handset components makers were mixed. Sunny Optical (02382) dipped 1.7% to HK$87.05. AAC Technologies (02018) softened 0.7% to HK$80.3.

Among individual stocks, Lenovo Group shares rose 3.7% to HK$5.08 on brokerage rating upgrade. Bank of America Merrill Lynch lifted the Chinese personal computer maker to a buy rating and raised its target price to HK$5.90 from HK$3.20, citing narrowing losses in the company's mobile and server businesses.

China Mobile (00941) bounced 2% to HK$74.8 after it reported faster 4G net user addition growth in July. The firm said it had added a net 6.498 million 4G customers in July.

OFFSHORE MARKET NEWS, US stock market closed higher on Friday, after reports that Chinese and U.S. negotiators are drawing up a road map for talks to try to end their trade impasse. The Dow Jones Industrial Average advanced 110.59 points or 0.4% to 25,669.32, the Nasdaq inched up 9.81 points or 0.1% to 7,816.33 and the S&P 500 rose 9.44 points or 0.3% to 2,850.13.

The major European markets also closed mixed on Friday. The U.K.'s FTSE 100 Index inched up by less than a tenth of a percent, the French CAC 40 Index and the German DAX Index edged down by 0.1% and 0.2%, respectively.

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