Blue chips rally as drop in oil prices lures players
The Hong Kong market rose to a seven-week high yesterday, following renewed investor interest in blue chips and a sharp drop in global oil prices on Thursday.
Brokers said sentiment remained positive for property and banking counters, as investors believed that the city's banks will be able to hold interest rates at current levels despite expectations of another rate rise in the United States next week.
'The theme in the market is still speculation over a revalued yuan and with the recent inflows of liquidity, the pressure is down on local interest rates,' Rexcapital Asset Management director Alex Wong Kwok-ying said. 'That will continue to help property stocks.'
The Hang Seng Index closed 69.78 points, or 0.5 per cent, higher at 13,909.42, off a high of 13,956.52.
Turnover was $17.39 billion, up significantly from $11.54 billion on Wednesday but still down from Tuesday's $20.14 billion.
Only four of the blue-chip index's 33 constituent stocks suffered losses, while six finished flat.
Banking giant HSBC and leading property developer Cheung Kong both finished unchanged - at $125 and $73.25, respectively.
Hang Seng Bank climbed 0.47 per cent to settle at $106.50.
Among other property stocks, Henderson Land Development rose 0.28 per cent to $36.10, while Sun Hung Kai Properties finished unchanged at $74.50.
One of the best-performing blue chips was China Mobile, which contributed 28.43 points to the index's advance.
The counter gained 1.71 per cent to close at $26.80, after the mainland's Ministry of Information Industry said the country's communication services revenue grew 8.8 per cent to 150.45 billion yuan for the first quarter, compared with a year earlier.
'The market was stronger than expected in blue chips, but the momentum is not that strong. I think most of the trading was futures-linked,' Mr Wong said.
He said the market seemed overbought and was nearing its resistance level of 14,000 points.
Brokers reported heavy buying in major blue chips by futures investors. The April index futures contract expired yesterday and many investors were rolling over their contracts to June.
Tai Fook Securities institutional sales head Raymond Chan said his team was 'busy all day handling orders for HSBC' shares.
'The big investors were trying to influence the futures settlement price by aggressively buying HSBC. That helped give the market some support,' Mr Chan said.
The price of crude oil fell for a fourth consecutive day yesterday to as low as US$44.97 a barrel on the Tokyo Commodity Exchange, after US data released on Wednesday showed that fuel stockpiles were at their highest level in three years.
'There was very aggressive selling in China commodity shares because of the weakness in oil prices,' Mr Wong said, which led to a 0.49 per cent drop in the H-share index to 4,698.59 points.
PetroChina dropped 1.04 per cent to $4.775, Zhenhai Refining was flat at $8.65 and Shanghai Petrochemical fell 0.85 per cent to $2.925. Sinopec shed 0.8 per cent to $3.10, while CNOOC settled unchanged at $4.325.
Star Cruises, the world's third-largest cruise ship operator, closed with a loss of 8.26 per cent at $2.775 on profit taking.
