Hong Kong Stocks Surge 2.70% by Close on Record Turnover

Hong Kong stocks surged 2.70 percent Thursday — chalking up gains of more than six percent in two days — with mainland investors piling into the market on a second day of record turnover.

The benchmark Hang Seng Index (HSI) added 707.53 points to 26,944.39 on turnover of HK$ 291.53 billion ($ 37.62 billion). The index jumped 3.80 percent on Wednesday with turnover at a then-record HK$ 250.03 billion.

But in mainland China the benchmark Shanghai Composite Index dropped 0.93 percent, or 37.28 points, to 3,957.53 on turnover of 816.7 billion yuan ($ 133.9 billion).

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, slid 0.57 percent, or 12.06 points, to 2,096.97 on turnover of 648.8 billion yuan.

Mainland investors have shifted into the HSI after a rally in Chinese markets saw them almost double in a little more than a year on the back of expectations the country’s leaders will unveil fresh stimulus measures.

The central bank has already cut interest rates twice since November, while Premier Li Keqiang last month suggested the government had the weapons to support growth if necessary.

Dealers have piled into the southern Chinese city via the Shanghai-Hong Kong Stock Connect, which links up the two exchanges. And for the second day in a row traders used up their daily quota of deals allowed under the scheme as valuations in the city are considered much cheaper.

While the Connect was initially met with scant interest, mainland authorities’ decision last month to expand the number of domestic fund-management firms allowed to buy stocks in Hong Kong has seen activity surge.

Source : AFP