Hong Kong Market gains on China policy easing

Headline indices of the Hong Kong stock market finished first trading day of 2020 in the green on Thursday, 02 January 2020, buoyed by easing Sino-U.S. trade tensions and monetary policy easing by China. At closing bell, the benchmark Hang Seng Index inclined 1.25%, or 353.77 points, to 28,543.52, with 37 of its 50 constituent members advancing. The Hang Seng China Enterprises Index added 1.37%, or 152.50 points, to 11,320.56. The local stock market closed on Wednesday for the New Year holiday.

Investors risk sentiments got a boot amid initial Sino-U.S. trade deal progress. The U.S. President Donald Trump said on Tuesday that Phase 1 of trade deal with China would be signed on Jan. 15 at the White House and that he would later travel to Beijing to begin negotiations on the next phase. That came following reports indicating Chinese Vice Premier Liu He, Beijing's top trade negotiator, could sign the agreement.

News of monetary policy easing by China also aided sentiment after the country's central bank on Wednesday cut the amount of cash that banks must hold as reserves to boost the economy. The People's Bank of China announced on Wednesday that it was going to lower the reserve requirement ratio for banks by 50 basis points with effect from Jan. 6, unleashing about 800 billion yuan ($115 billion) in funds. While the cut was not a surprise, the early announcement suggests policy makers may add more liquidity in the next few weeks to match cash demands ahead of the Lunar New Year.

Blue chips were mostly firmer. HSBC (00005) edged up 0.1% to HK$60.9. HKEX (00388) added 2.9% to HK$260.4. Tencent (00700) jumped 1.8% to HK$382.4 after the Chinese tech giant said it plans to buy a 10% stake in Universal Music Group (UMG).

Macau gaming counters soared despite the gaming regulator announced that December gross gaming revenue dropped 13.7%. the gain came Jefferies put out a note saying the challenges Macau casino operators have faced have weakened. SJM Holdings (00880) climbed 5.1% to HK$9.32. Sands China (01928) advanced 2.6% to HK$42.75. Galaxy Entertainment (00027) surged 5.8% to HK$60.7. Melco International (00200) gained 2.3% to HK$22.4. Wynn Macau (01128) bounced 4.7% to HK$20.1. MGM China (02282) also spiked 6.9% to HK$13.6.

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