Hong Kong Market extends gains

Headline indices of the Hong Kong share market closed higher on Wednesday, 19 September 2018, with investor sentiment buoyed by gains on Wall Street overnight and gains in other Asian market today. Stocks were also boosted by Beijing pledging to step up investment in key areas of the economy to offset the adverse impact from the trade war and refraining from using heavy-handed measures to retaliate against the US. The Hang Seng Index added 322.71 points or 1.19% to 27,407.37. The Hang Seng China Enterprises Index rose 184.71 points or 1.75% to 10,741.69. Turnover increased to HK$96.4 billion from HK$86.4 billion on Tuesday.

Equity markets in Asia took their cues from Wall Street overnight, which posted a broad-based rally on Tuesday amid emerging views that the US-China trade dispute's impact on world growth might not be as heavy as previously feared.

The administration of U.S. President Donald Trump announced Monday that it will impose a 10% tariff on $200 billion worth of Chinese imports from Sept. 24 and increase the rate to 25%, effective on Jan. 1 next year. In response, China said it will hit back with retaliatory duties of up to 10% on $60 billion worth of U.S. products. A risk-on mood grew among investors as the tariffs were smaller than initially feared.

Shares of property developers climbed on preferential tax policies. As per reports, the Chinese government was working on detailed plans that would allow mortgages and rents to be deducted from individuals' taxable income. The rules are likely to take effect in January 2019. China Vanke jumped 6.1 per cent to HK$27. Sunac China Holdings advanced 4.2 per cent to HK$25.90 and Country Garden Holdings rose 2 per cent to HK$11.10.

Chinese financials followed the rally of mainland counterparts. ICBC (01398) rose 1.5% to HK$5.54. CCB (00939) added 1.7% to HK$6.65. BankComm (03328) nudged up 0.7% to HK$5.69. ABC (01288) inched up 0.5% to HK$3.72. Ping An (02318) put on 2.4% to HK$77.15. China Life (02628) advanced 1.3% to HK$17.28.

Defensive stocks slipped as investors cashed out amid the rising risk appetite. China Mobile dropped 0.8 per cent to HK$75.75 and electricity producer Power Assets Holdings eased 0.4 per cent to HK$55.95.

Energy stocks gained after crude oil prices rose more than 1% on signs that OPEC would not be prepared to raise output. CNOOC (00883) rose 2.5% to HK$14.94. Sinopec (00386) gained 2.9% to HK$7.81. PetroChina (00857) added 2% to HK$6.17.

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