Hong Kong Market gains on prospects for global rate cuts

The Hong Kong share market closed higher for third straight session on Thursday, 25 July 2019, as investors risk sentiments underpinned by following gains on Wall Street overnight and on hopes imminent interest rate cuts in Europe and the United States. Meanwhile, sentiments improved on potential progress in Sino-US trade talks.At closing bell, the Hang Seng Index added 0.25%, or 70.26 points, to 28,594.30. The Hang Seng China Enterprises Index was up 0.66%, or 71.48 points, to 10,930.36.

Disappointing manufacturing activity surveys from Europe and the United States hardened expectations that the European Central Bank will cut is policy rate later in the day, and for the US Federal Reserve to cut rates next week.

Top US and Chinese negotiators will meet face-to-face next week for the first time since Presidents Donald Trump and Xi Jinping agreed to revive talks to end their year-long trade war. The talks will be carried out on the basis of equity and mutual respect, China's Ministry of Commerce spokesman Gao Feng said during a press conference, confirming the White House's announcement on Wednesday and media reports earlier this week.

Blue chips were mixed. HSBC (00005) edged down 0.1% to HK$64.65. HKEX (00388) added 0.8% to HK$268.8. Tencent (00700) shot up 1.9% to HK$372.4. China Mobile (00941) softened 0.6% to HK$68.25. AIA (01299) dipped 1.4% to HK$85.55 despite the bullish comment from Morgan Stanley.

Chinese drug manufacturers were mostly higher as the Chinese government pushed the policy to make Chinese medicine and western medicine supplement each other. CSPC Pharmaceutical (01093) soared 6.2% to HK$14.16. It was the top blue-chip winner. Sino Biopharmaceutical (01177) gained 3.7% to HK$9.59. 3SBio Inc (01530) gained 3.2% to HK$13.38. But Shandong Xinhua Pharmaceutical (00719) dipped 1.3% to HK$3.77. Sinopharm (01099) edged up 0.7% to HK$30.2.

China Literature, the country's largest online publishing website, plummeted by 12% to HK$33.25, following a media report of its big shareholder's stake cut plan.

Carlyle Group, an early investor in China Literature that owned 4.9% of the company's shares, offered 28 million shares at HK$35.5 to HK$36 apiece through its investment vehicle Luxun Investment.

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