Stocks News
- HK share prices soar after Fed interest rate cut
Date: 20-Sep-2007 Sources: (Xinhua Online)
HONG KONG, Sept. 19 (Xinhua) -- Hong Kong stocks surged 977.79 points, or 3.98 percent, to close at a record high of 25,554.64 on Wednesday, as a larger-than-expected interest rate cut by the U.S. Federal Reserve ignited a broad rally.
Turnover also soared to a record high of 138.7 billion HK dollars (17.82 billion U.S. dollars), up 42 percent from Tuesday's80.5 billion HK dollars, with the total capitalization of the market hitting a new high of 18.97 trillion HK dollars.
The Hang Seng benchmark index jumped 934.51 points, or 3.36 percent, to open at record high of 25511.36 on Tuesday morning. The market stretched its gains in the afternoon after the city's biggest bank, HSBC Holdings plc said it would lower its best lending rate in Hong Kong by 25 basis points to 7.50 percent. The move was mirrored by BOC (Hong Kong) Ltd, Hang Seng Bank, Standard Chartered Bank (Hong Kong) and Bank of East Asia hours later.
Analysts said they expect further gains in the next session because of abundant liquidity and also because the interest rate cut has helped to ease concerns about the credit turmoil that has hit global markets.
Overnight, the Dow Jones Industrial Average rose 2.5 percent, its biggest one-day point jump in nearly five years, following the Federal Reserve's decision to cut its benchmark interest rate by a half percentage point to 4.75 percent.
Some analysts expects the Hang Seng Index to test 26,500 before year-end, but they also cautioned about volatility in the near term.
The interest rate sensitive property stocks performed well significantly. Cheung Kong Henderson Land, SHK PPT, New World, Sino Land and Hang Lung PPT advanced 4.11 per cent to 10.75 percent.
The H-share index closed up 521 points at 15,255. Chinese mainland financial stocks were speculated higher across the board. The three insurers jointly breached tops. PICC P&C that surged Tuesday extended its strength, up another 9.18 percent, setting a new high; Ping An surged 7.75 percent to 98 HK dollars, once setting a new high of 99.5 HK dollars; China Life mounted 2.35 percent, breaking a new high.
The six mainland banks got up steam. CCB leapt 4.09 percent, ICBC lifted 1.79 per cent after UBS raised its rating to Buy with target at 6.3 HK dollars; Bank of China, CM Bank, Bankcomm and CITIC Bank added 1.58 percent to 3.31 percent.
On other bank stocks side, HSBC was up 2.69 percent, Hang Seng Bank up 3.09 percent at 136.9 HK dollars, setting a new high of 140 HK dollars, BOC HK up 1.14 percent, Bank of East Asia up 3.71 percent on the rumours over share subscription by a Spanish bank, and StanChart up 7.02 per cent on reasonable pricing for acquisition of the banking business of AXP.
With the drops in the U.S. dollars stimulating raw materials higher, related stocks mounted. CNOOC surged 12.38 percent, setting a new high, while PetroChina and Sinopec Corp put on 3.1 percent and 4.29 percent; China Oilfield jumped 5.15 percent,
On coal stocks side, China Coal that was preparing for A share issuance to expand Inner Mongolia project leapt another 7.56 percent, setting a new high; China Shenhua was up 6.71 per cent, setting a new high, and Yanzhou Coal up 2.99 percent. (One U.S. dollar equals 7.78 HK dollars)
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