HONG KONG - Hong Kong stocks rose for the second straight day, climbing 0.56
percent on Tuesday as China Mobile Ltd. led blue-chip gains, while strong crude
prices boosted oil stocks such as PetroChina Co. Ltd.
The benchmark Hang Seng index added 94.65 points to finish at 17,048.20.
Trading was thin ahead of the U.S. Federal Reserve's policy-setting meeting
later in the day, with turnover totalling HK$20.5 billion, nearly matching
Monday's HK$20.0 billion.
"We don't see any negative factors before the Federal Reserve meeting," said
Y.K. Chan, strategist at Phillip Securities.
"Most of the expectations of a rate pause have been factored in, but people
are still optimistic."
Other market watchers said strong fundamentals underpinned the market's
strength.
"We have been positive on the economic environment and fund flows, which we
don't expect to retreat," said Alice Lung, research director at ICEA Securities.
"The valuation of the Hang Seng index is relatively attractive, being in the
middle to low end of a historical range. The (earnings) results have been
encouraging for the banks, and news about M&A activities in China and
upcoming IPOs should draw attention."
Telecoms were mostly up, with China Mobile, the country's top cellular
operator, providing the biggest boost to the blue chips with a 1.2 percent gain
to HK$49.85. Fixed-line carrier China Netcom Group Corp (Hong Kong) Ltd. jumped
2.7 percent to HK$13.74.
"The market strength is really coming from the telco sector, which people
view as defensive Chinese plays," said Andrew Sullivan, director of sales
trading at Daiwa Securities.
Strong crude prices boosted oil stocks. China's top oil producer PetroChina
and the day's third most active stock, rose 0.8 percent to HK$8.88. Offshore oil
producer CNOOC Ltd. gained 0.9 percent to HK$6.80.
Gold miner Zijin Mining Co. Ltd. dropped 2.6 percent to HK$4.08 despite
unveiling this week a doubling of interim earnings as investors fretted over
rising costs and a potential correction in commodity prices.
(For details, see [nHKG21350]).
Mainland carrier Air China Ltd. sank 3.5 percent to HK$2.76 after saying on
Tuesday it had scaled down its Shanghai stock offer by 39 percent to 1.639
billion shares from an original plan of 2.7 billion shares after weak
subscription from institutional investors. (For details, see [ID:nN07408246]).
Dongfeng Motor Group Co. Ltd. tumbled 7.2 percent to HK$2.97 after its JV
with Nissan Motor reported its July passenger vehicle sales fell 39 percent
year-on-year, UBS cited.
(US$1=HK$7.8)
