Hong Kong Stocks end edge higher

Headline indices of the Hong Kong share market closed edge higher on Thursday, 06 June 2019, as positive lead from Wall Street overnight offset by worries over global growth after the US and Mexico failed to reach a deal to avert proposed tariffs. At closing bell, the Hang Seng Index advanced 0.26%, or 69.84 points, to 26,965.28. The Hang Seng China Enterprises Index was down 0.1%, or 10.73 points, to 10,334.32. Hong Kong markets will be closed for Dragon Boat Festival on Friday.

Local market received a boost from gains in the Wall Street overnight on growing hopes that the Federal Reserve will lower interest rates this year to reignite an economy wounded by trade battles. Powell said the central bank will keep an eye on current developments in the economy, and would do what it must to sustain the expansion. The Dow Jones Industrial Average rose 207.39 points to 25,539.57, while the S&P 500 advanced 0.8% to 2,826.15. The Nasdaq Composite closed 0.6% higher at 7,575.48.

 

However, market topside capped, as investors risk sentiment remains fragile as optimism over monetary policy is offset by ongoing concerns over trade after a meeting between U.S. and Mexican officials ended with scant sign of progress.

The U.S. and Mexico failed to reach a deal on immigration issues during a Wednesday meeting, just days before 5% tariffs on all Mexican imports are set to kick in. Talks will resume on Thursday. Progress is being made, but not nearly enough!" Trump said in a tweet on Wednesday evening. Trump announced those duties in a surprise tweet last week, saying they would be imposed until such time as illegal migrants coming through Mexico, and into our Country, STOP.

The most recent U.S. tariff threat on Mexico has led several market experts to forecast increased risk of a recession in the world's largest economy, which could put pressure on the Federal Reserve to cut rates.

Blue chips were mostly higher. HSBC (00005) edged up 0.1% to HK$64.3. HKEX (00388) added 0.7% to HK$250.6. Tencent (00700) inched down 0.2% to HK$330.4. AIA (01299) put on 0.8% to HK$74.3.

China's MIIT today granted 5G licenses to four telecom firms, including the trio listed in HK. China Mobile (00941) edged up 0.2% to HK$70.4. China Unicom (00762) gained 0.4% to HK$8.4. China Telecom (00728) put on 2.3% to HK$4.01.

But 5G telecom gear providers were volatile. China Tower (00788) slid 4% to HK$1.91 after jumping more than 2% earlier. ZTE Corp (00763) plunged 5% to HK$20.05. Comba Telecom (02342) sank 4.2% to HK$1.6. China Communications Services (00552) shed 3.4% to HK$6. Nanjing Panda Electronics (00553) descended 3.6% to HK$2.7.

Oil prices dipped on rising crude inventory in the US. CNOOC (00883) was down 1.8% to HK$12.16.

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