Hong Kong Market extends gains on US-China trade optimism

The Hong Kong stocks closed higher for second straight session on Friday, 11 October 2019, , on tracking gains on the Wall Street overnight with all eyes on outcome of high-level meeting between US and Chinese trade officials later in the day. At closing bell, the benchmark Hang Seng Index surged 2.34%, or 600.51 points, to 26,308.44. The Hang Seng China Enterprises Index added 2.3%, or 234.09 points, to 10,452.58.

Investor sentiment got a boost on tracking gains on the Wall Street overnight which rose on hopes that top-level U.S.-China trade talks would yield at least a partial deal, after President Donald Trump tweeted he would meet Chinese Vice Premier Liu He on Friday for further trade talks and Liu said Beijing was willing to reach an agreement with Washington to prevent any further escalation in the trade war.

The US stock market finished higher on Thursday, 10 October 2019, as investors took an optimistic stance ahead of the resumption of high-level trade talks in Washington. At closing bell, the Dow Jones Industrial Average advanced 150.66 points, or 0.6% to 26,496.67. The S&P 500 gained 0.7% to 2,938.13 while the Nasdaq Composite climbed 0.6% to 7,950.78.

Trade negotiations between the United States and China resumed on Thursday for the first time since July 2019. The U.S. and China are currently in the midst of high-level trade negotiations in Washington.

Market participants remained focused on outcome of the trade talks in Washington D.C. between the U.S. and China with import tariffs set for $250 billion worth of Chinese goods at a rate of 30% from 25% on 15 October 2019. A 15% tariff on an additional $160 billion worth of Chinese imports is also expected to kick in on 15 December 2019. The world's two largest economies seek to reach a deal to end their protracted trade war that has seen tariffs slapped on billions of dollars worth of each other's goods since the start of 2018, battering financial markets and souring business and consumer sentiment, and driven worries over the global economic outlook. The developments of Sino-US trade talks have been a major factor impacting the Hong Kong market, and any progress or partial agreement would greatly boost investor sentiment.

Shares of property developers finished as big winners on hopes that government possibly moving ahead to buy some unused farmland to build public housing. Sun Hung Kai closed up 3.7% at HK$112.20, Wharf Real Estate rose 3.58% to HK$43.35, New World climbed 3.19% to HK$10.36 and Henderson Land finished ahead 3.75% at HK$37.35. MTR, which owns the subway system that has been the frequent target of hard-core protesters as well as malls, closed up 2.69% to HK$43.85.

Chinese sportswear retailer Topsports International Holdings, which debuted in Hong Kong on Thursday, finished the day up 4.86% at HK$9.70. It was rated a new outperform by Macquarie, with a price target of HK$11.20.

Singaporean automotive service provider Optima Automobile Group Holdings, which began trading on the GEM board Friday, closed up 72.2% at HK$0.465.

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