dilys520 2008-7-19 03:42 PM
Bears back off as HSI rides US lenders' rally
Bears back off as HSI rides US lenders' rally
Hong Kong stocks advanced 2.41 percent yesterday, powered by the surge of US bank stocks after unexpectedly strong results from Wells Fargo, the fifth-largest US lender, and lower oil prices which helped airlines and refiners.
The benchmark Hang Seng Index rose 511.22 points to close at 21,734.72. Mainboard turnover increased to HK$63.46 billion from HK$59.8 billion.
"A turnaround for the HSI still cannot be seen," said Sun Hung Kai Financial strategist Castor Pang Wai-sun. "However, the market will not be as bearish as before, and is not likely to see a big drop like 3 percent."
Pang said there are still worries over the mainland market and results from major US financial firms.
Financial stocks gained after the US bank reported earnings which helped ease concern about credit losses, lifting shares of HSBC Holdings (0005) 3.72 percent to HK$117, and sending China Construction Bank (0939) 3.21 percent higher to HK$6.44.
Shares in local bourse operator Hong Kong Exchanges and Clearing (0388) surged 4.25 percent to HK$108.
The Shanghai Composite Index closed down 0.78 percent at 2,684.78. Hong Kong's China Enterprises Index of H shares rose 2.9 percent, or 339.78 points, to 12,056.56.
Lower oil prices boosted airlines and refiners, easing concerns over rising fuel costs. Shares in flag carrier Cathay Pacific Airways (0293) surged 4.56 percent to HK$14.68, Air China (0753) soared 5.82 percent to HK$4.18 and China Southern Airlines (1055) added 4.18 percent. Top refiner Sinopec (0386) jumped 4.47 percent to HK$7.48, while PetroChina (0857) rose 3.21 percent to HK$9.98.