Hong Kong stocks hover at over 2-year highs on China strength
Hong Kong stocks took a breather on Friday to hover around more than two-year highs, fuelled by robust earnings, strong Chinese factory growth and hopes of more economic reforms from Beijing.
Both the Hang Seng index and the China Enterprises Index dripped 0.1 percent, to 27,953.16 points and 11,285.55 points, respectively.
The Hang Seng had gained 2.4 percent in August, while the HSCE, which tracks Chinese firms, rose 4.3 percent.
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The Hong Kong market has climbed for eight months in a row, encouraged largely by stronger-than-expected economic growth in China, which is producing generally healthier corporate balance sheets.
A private survey released on Friday showed China’s manufacturing activity expanded at the fastest pace in six months in August, confirming a similarly upbeat official survey published on Thursday.
Further gains were seen in the raw material sector, which has been bullish on the back of soaring commodity prices in China and a building boom. The sector index rose nearly 2 percent, taking its rally so far this year to more than 30 percent.
Mainland steel makers, including Maanshan Iron & Steel and Angang Steel jumped as investors bet they will benefit from Beijing’s stepped-up push to shut more inefficient plants, thereby reducing both excess capacity and curbing pollution.
China’s top coal miner China Shenhua Energy Co Ltd rose 0.7 percent in Hong Kong, after touching the highest level since January, 2014, buoyed by a major merger deal.
Parent Shenhua Group Corp Ltd will take over China Guodian Group Corp, among the country’s top five state power producers, in a deal that will create the world’s largest power utility, worth $278 billion.
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