Energy firms bask in oil price hike as stocks hit 6-week high
Updated: 2015-10-08 09:17
By Celia Chen in Hong Kong(HK Edition)
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City joins Asian-wide rally as oil prices soar on production cut talk
Hong Kong stocks headed for their highest close in six weeks on Wednesday, with energy firms leading the advance and the financial sector extending gains in an Asia-wide rally.
The surge was driven by energy stocks on the back of higher oil prices amid expectations of cutbacks in production by the world's oil-producing countries.
The benchmark Hang Seng Index (HSI) soared 3.1 percent, or 684.14 points, to 22,515.76, while the Hang Seng China Enterprises Index jumped 4.7 percent, or 463.26 points, to 10,394.79.
Crude prices extended gains from a one-month high in anticipation of a drop in supply in the US and global markets. The US Energy Information Administration raised its global oil demand forecast for this year to an average of 93.79 million barrels per day - from 93.62 million a month ago.
Almost half of the top 10 scorers on the HSI were oil companies. CNOOC Ltd jumped the most, picking up 13.74 percent to HK$9.52, while both China Shenhua Energy Co Ltd and PetroChina Co Ltd added 9.25 percent.
Daniel So, a strategist at CMB International Securities Ltd, predicted that H shares will stay strong over the next week ahead of the Fifth Plenary Session of 18th Communist Party of China Central Committee, with hopes of further market supportive policies from the central government.
Similar views were expressed by Bernard Aw, a market strategist at IG Group.
He said a strong rally in Hong Kong equities, particularly H shares, may have helped bolster investor sentiment. The strong performance suggests that Chinese equities could resume trading on a positive note when mainland bourses reopen on Thursday following the week-long National Day break.
Financial stocks also benefitted on growing expectations that the US Federal Reserve may wait till next year before raising interest rates following the release of weak employment data in the US on Friday.
Bank of China Ltd rose 4.64 percent to HK$3.61, Industrial and Commercial Bank of China Ltd climbed 4.97 percent to HK$4.86, and China Construction Bank Corp was up 4.49 percent. The local rally was further fueled by mainland reports that foreign-exchange reserves had fallen at a slower pace in September.
The central government reported a smaller-than-estimated decline in its foreign-exchange reserves, which dropped to $3.51 trillion at the end of last month after registering their biggest monthly drop the previous month, the People's Bank of China said on Wednesday.
A smaller decline in foreign-exchange reserves suggests that capital outflow has eased, while the offshore renminbi moved toward a two-month high.
Bloomberg contributed to the story.
celia@chinadailyhk.com
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With hopes of further market supportive policies from the central government, H shares are expected to perform strongly over the next week, experts say. Asia News Photo |
(HK Edition 10/08/2015 page9)