Hong Kong Market gains on upbeat earnings, trade talk's hopes

The Hong Kong share market finished session higher on Friday, 23 August 2019, as risk sentiments encouraged by a mix of positive factors including China's monetary easing, upbeat earnings from insurers, and hopes for progress in Sino-U.S. trade negotiations after a constructive exchange this week between deputy-level negotiators. At closing bell, the Hang Seng Index inclined 0.5%, or 130.61 points, to 26,179.33. The Hang Seng China Enterprises Index rose 0.71%, or 71.83 points, to 10,194.73. The benchmark gained 1.7% this week, recording its best weekly performance in nine weeks.

The markets welcomed a series of new policy developments this week. China reformed its interest rate formation mechanisms that led to a lower lending reference rate on Tuesday, effectively easing the monetary policy. Over the weekend, a new plan announced by the government to transform Shenzhen into a globally competitive city also sparked investors' enthusiasm.

Meanwhile, the US and Chinese trade negotiators are schedule to meet in person for the latest round of talks, White House economic adviser Larry Kudlow said on Thursday.

Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Symposium later today will be closely watched by the markets. He is likely to nod to the possibility that trade tensions, which have escalated, may worsen the global economic slowdown and ultimately make more US rate cuts necessary. Investors believe Powell will use the event to set the stage for a 25 basis point rate cut in September.

Blue chips were mixed. HSBC (00005) rose 0.4% to HK$57.1. HKEX (00388) nudged 0.3% to HK$252.4. Tencent (00700) gained 1% to HK$334.2. China Mobile (00941) rose 0.8% to HK$66.8. AIA (01299) jumped 2% to HK$77.75.

Insurers led the advance in Hong Kong, after AIA Group and China Life Insurance reported better-than-expected earnings for the first half of this year, driven by strong growth in the mainland Chinese market. AIA Group jumped 2% to HK$77.75. China Life Insurance gained 3.2% to HK$18.72.

Pharmaceutical counters were higher. China Traditional Chinese Medicine (00570) surged 12.3% to HK$3.83 after Morgan Stanley's upgrade. CSPC Pharmaceutical (01093) shot up 3.4% to HK$15.7. Sino Biopharmaceutical (01177) added 2.1% to HK$10.78. WuXi AppTec (02359) gained 4.5% to HK$87.55. Sinopharm Group (01099) put on 1.6% to HK$29.3. 3SBio Inc. (01530) added 1.5% to HK$12.5.

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