The Property Sub-index rose 1.48% today, while the Industrial Sub-index soared 2.21% and the Public Utilities Sub-index added 0.83%.
Photo: Andrew Vanburen

HONG KONG’S BENCHMARK Hang Seng Index jumped 2.60% this week, finishing Friday up 2.08% at 22,444.80 thanks in large part to a very strong Thursday performance in the US capital markets.

Analysts say that any near-term resolution in the US debt ceiling debate will also provide significant upside support.

Leading the end-week charge today was the Hang Seng’s Financial Sector Sub-index, which added 2.24% today, lifted by the 1.21% jump yesterday in New York, as well as signs of gradual progress on the sovereign debt crises in Europe.

Real estate developers weren’t far behind, with the sector – like banks and insurers, heavily weighted within the Hang Seng Index – usually moving in tandem with financial institutions.

The Property Sub-index rose 1.48% today, while the Industrial Sub-index soared 2.21% and the Public Utilities Sub-index added 0.83%.

A Chinese language piece in Sinafinance cited an analyst with South China Financial as saying: “There have been few directional hints in the market lately. Although the HSBC July PMI numbers for the PRC showed a clear slowdown, most are aware that it is almost entirely a result of recent macroeconomic moves from Beijing and not wholly market-based.

“In addition, Hong Kong shares are moving more independently from A-shares of late, so taking cues from Shanghai and Shenzhen is becoming less reliable.”

Hong Kong's benchmark Hang Seng Index had its best day in two months

In fact, the analyst’s assessment rings true today as Hong Kong shares shot up 2.08% while the benchmark index for A-shares in the PRC – the Shanghai Composite – only managed a 0.18% rise on Friday.

The analyst added that yesterday’s strong showing in New York was likely to carry over the next few days and provide sustained support in Hong Kong.

In the Black: Coal firms did well today. Photo: Andrew Vanburen

“There is no need to be too pessimistic. But investors should keep an eye on trading turnover, because if levels slip suddenly, then there could be another correction in the short term.”

Friday’s 2.08% jump in Hong Kong shares was the biggest one-day gain in two months.

Today’s biggest winning major stock was investment holding company Li & Fung Ltd (HK: 494) which leapt 5.50% to close at 14.2 hkd.

Also leading today’s charge was China Coal Energy Co Ltd (HK: 1898), up 3.87% at 11.28 hkd, China Shenhua Energy Co Ltd (HK: 1088) rose 3.09% to 40.1, CNOOC Ltd (HK: 883) added 2.73% to 17.32 and top aluminum firm Chalco (HK: 2600) ended 2.29% higher at 6.26.

Real estate developers, some of the “first responders” to any uptick in economic of financial optimism, were also up across the board today.

Wharf Holdings Ltd (HK: 4) jumped 3.20% to 56.45 hkd while peer New World Development Ltd (HK: 17) added 3.07% to 11.4.

In the financial sector, HSBC Ltd (HK: 5), the heaviest-weighted counter within the Hang Seng Index, had its best single day in six months, rising 2.77% to close at 78.2 hkd.

See also:

CHINA HIGH PRECISION: HK Listco’s 1H Off Charts On Indicator Sales

HK WEEKLY WRAP: Index Down 3.7% On Macro Jitters 

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