Hong Kong Market extends gain

The Hong Kong stock market closed higher on Wednesday, 27 November 2019, as investors cheered signs of progress in efforts to defuse the prolonged Sino-U.S. trade war. However, market gains capped after weaker than expected China's industrial profit data. At closing bell, the benchmark Hang Seng Index advanced 0.15%, or 40.08 points, to 26,954. The Hang Seng China Enterprises Index grew 0.03%, or 2.74 points, to 10,620.11.

Sentiment was brightened by comments by US President Donald Trump on Tuesday that Washington was in the "final throes" of work on a deal that would defuse a 16-month trade war with Beijing. Trump's optimistic comments came one day after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.

However, market gains capped after an official report showed profits at China's industrial firms shrank at their fastest pace in eight months in October. China's industrial profits decreased 9.9% on a yearly basis in October, following a 5.3% decrease in September, largely due to falling producer prices and slowdown in production and sales growth, data from the National Bureau of Statistics showed Wednesday. This was the third consecutive decrease. During January to October, industrial profits logged an annual fall of 2.9%. Profits had decreased 2.1% in January to September period. The slowdown in the global economy and trade frictions is likely some of the main drivers behind the disappointing industrial profit figure.

During an Oval Office event Tuesday, U.S. President Donald Trump said that Washington was in the final throes in its efforts to reach a trade deal with China, but also underscored that Americans stand with pro-democracy protesters in Hong Kong. China said on Tuesday it had summoned the U.S. ambassador to protest the passage in the U.S. Congress of the Hong Kong Human Rights and Democracy Act.

Alibaba Group Holding, which runs China's biggest e-commerce platform, added 3% to HK$193.20, extending a 6.6% gain in debut on Tuesday. Other Alibaba group stocks were boosted. Alibaba Health (00241) soared 4.4% to HK$8.6. Alibaba Pictures (01060) added 1.6% to HK$1.31. Sun Art Retail Group (06808) rose 1.1% to HK$9.04.

Property counters saw buying orders on abated social unrest. MTR Corp (00066) jumped 3.8% to HK$45 becoming the best performing blue chip after Goldman Sachs's upgrade. CK Assets (01113) added 0.9% to HK$52.9. Hang Lung Properties (00101) rose 0.7% to HK$16.42. Hysan Development (00014) jumped 3.1% to HK$30. Wharf (00004) shot up 2.9% to HK$18.48.

MTR, the operator of Hong Kong's subway system, climbed 3.8% to HK$45 after Goldman Sachs raised its rating on the stock to buy from neutral and boosted its target price to HK$54.

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