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Hong Kong Stocks build on gains

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Headline indices of the Hong Kong share market closed higher for second straight session on Tuesday, 11 June 2019, on tracking rally in the Mainland A-share market after Chinese authorities appeared to back new measures to support the economy, offsetting U. S. Donald Trump's latest threat of more tariffs. Additionally, the dropped plans to impose tariffs on Mexican goods and expectations for interest rate cuts globally have given investors a catalyst to re-enter city market. Market gains were, however, limited as fresh U. S. trade threats against China, with eyes on a possible meeting between Trump and at the summit in this month. At closing bell, the advanced 0.76%, or 210.70 points, to 27,789.34. The Enterprises Index was up 0.9%, or 93.21 points, to 10,620.13. Turnover decreased slightly to HK$91.6 billion from HK$91.9 billion on Monday.

The market mood was brightened on tracking positive close of US market overnight after suspended plans to impose tariffs on Mexican goods after the struck a deal on immigration. The Dow Jones Industrial Average rose 78.74 points, or 0.3%, higher at 26,062.68.

The S&P 500 gained 0.5% at 2,886.73. The Nasdaq Composite rose 1.1% to 7,823.17.

Also, local market received a boost on decision by Chinese authorities to back special-purpose bond issuances by local governments. The Chinese said on late Monday that special bonds sold by local governments will be allowed to bankroll construction of key projects and financial institutions will be encourage to provide additional funding. The move is an effort to accelerate financing of major projects through the bond issuances, which are used largely for infrastructure investment, including highways, gas and power supply and railways, which would help prop up a slowing economy.

Market gains were, however, limited after continued rumble of hostile rhetoric from the U. S. and over trade. China's foreign ministry on Tuesday said it would respond firmly if the U. S. insisted on escalating trade tensions, after U. S. on Monday said further tariffs on Chinese imports would take effect if the two don't reach a deal at a meeting of Group of 20 leaders later this month.

Chinese officials have not confirmed that President Xi will meet with president Trump at the meeting, to be held June 28-29. President Trump said Monday that if Xi doesn't meet with him, additional tariffs will be placed on Chinese goods.

Shares of Infrastructure counters rose after China's central government allows local government to use specific bond issuance program as an for infrastructure development. (00390) soared 7.8% to HK$6.21. (01800) jumped 4.9% to HK$7.35. Construction (01186) surged 7.2% to HK$10.08. (01766) gained 3.7% to HK$6.78. Zhuzhou CRRC Times Electric (03898) put on 1.7% to HK$42.35.

surged 7.7% to HK$33.50, after shareholders of the approved a plan to spend as much as HK$500 million buying back no more than a 10% stake in the following six months.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 11 2019. 20:48 IST
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