Hong Kong Stocks rise after China central bank announces fresh stimulus

The Hong Kong stock market finished session higher on Monday, 17 August 2020, following gains in the Mainland A-share market, after China's central bank injected liquidity into the financial markets to support banks and to combat the economic fall out of the coronavirus pandemic.

At closing bell, the benchmark Hang Seng Index added 0.65%, or 164.33 points, to 25,347.34. The Hang Seng China Enterprises Index rose 1.16%, or 119.44 points, to 10,385.90.

The People's Bank of China added 700 billion yuan (US$101 billion) of one-year funding through its medium-term-lending facility, while keeping the interest rates unchanged at 2.95%, it said in a statement. This more than offset the 400 billion yuan in loans due on Monday, and another 150 billion yuan maturing on August 26.

 

Investors' reaction to index compiler Hang Seng Indexes company's upcoming revamp was mixed. On Friday, it was announced that Alibaba Group Holding, mobile phone maker Xiaomi and China's largest drugs development and manufacturing services provider WuXi Biologics will be included in the benchmark Hang Seng Index from September 7. The three firms replace snack maker Want Want China, developer Sino Land, and China Shenhua Energy on the gauge, indicating a shift from traditional industries to new economy and biotech firms. Xiaomi rose 5.6% to HK$16.20, while WuXi Biologics increased 4.7% to HK$169.00. Alibaba fell 1.6% to HK$242.80.

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