January 29, 2009 / 5:27 AM / 9 years ago

HK shares extend rise to midday, led by HSBC,banks

 * HSBC, financials lead market rally on U.S. aid bill
 * Turnover thin as small deals drive technical rebound  (Updates to midday)
 By Nerilyn Tenorio
 HONG KONG, Jan 29 (Reuters) - Hong Kong shares ended the morning 5.5 percent higher on Thursday as small dealers kept the momentum up in financials on hopes the U.S. Congress-approved $825 billion stimulus package would help avert a deeper recession.
 Index heavyweight and Europe's biggest lender HSBC (0005.HK) rallied 8.6 percent, largely fuelling the Hong Kong benchmark index's advance.
 Other blue chip financials rose, with sentiment buoyed by the U.S. government's plan to create a government "bad bank" to absorb toxic assets [ID:nLSI502891].
 "Hong Kong reopened after a three-day break and saw a good rebound, largely following gains in the U.S. and Europe," said Linus Yip, strategist at First Shanghai Securities.
 The Hang Seng Index .HSI rose 688.17 points to 13,266.77 points.
 Mainboard turnover grew to HK$23 billion from midday Friday's nearly HK$19 billion.
 But Yip warned the market's gains may not be sustained for long, saying big investors had not yet returned from the holidays.
 "The day's high may have already been reached. The gains so far are probably just driven by technical factors," he said.  HSBC's rise to HK$62.4 by midday was in line with Wednesday's rally on Wall Street, where Bank of America (BAC.N) climbed nearly 14 percent and Citigroup (C.N) shot up more than 18 percent on optimism the Obama administration was making progress on a plan to relieve banks of money-losing assets.
 Merrill Lynch's rating HSBC Holdings a 'buy' at HK$60 a share also helped propel the stock higher.
 The China Enterprises Index .HSCE of top locally listed mainland firms had gained 6.5 percent to 7,097.58 points.    
 China's biggest lender ICBC (1398.HK) jumped 5.6 percent, China Construction Bank (0939.HK) soared 6.8 percent, Bank of China (2388.HK) climbed 5.5 percent and China Life (2628.HK) rallied 6.8 percent.
 Oil companies advanced, although oil prices edged down on Thursday after gaining the previous day when U.S. government data showed draws in distillate and gasoline inventories and OPEC vowed to fully implement steep supply cuts by the end of the month.
 Sinopec (0386.HK) rose 5.7 percent, while CNOOC (0883.HK) climbed 5.4 percent and Petrochina (0857.HK) jumped 6 percent.
 Major property developer Sun Hung Kai Properties (0016.HK) gained nearly 5 percent following a newspaper report that the company was expected speed up efforts to sell new residential units this year while tightening control of construction costs.   (Reporting by Nerilyn Tenorio; Editing by Jonathan Hopfner)                               

    0 : 0
    • narrow-browser-and-phone
    • medium-browser-and-portrait-tablet
    • landscape-tablet
    • medium-wide-browser
    • wide-browser-and-larger
    • medium-browser-and-landscape-tablet
    • medium-wide-browser-and-larger
    • above-phone
    • portrait-tablet-and-above
    • above-portrait-tablet
    • landscape-tablet-and-above
    • landscape-tablet-and-medium-wide-browser
    • portrait-tablet-and-below
    • landscape-tablet-and-below