Hong Kong stocks rise most in two weeks as bargain hunting buoys up HSBC and other lenders
- Traders loaded up on Hong Kong-listed banks that were half as expensive as the Hang Seng Index
- Tencent falls through key support level
Hong Kong’s stocks posted their biggest gain in almost two weeks as traders chased banks, the cheapest sector, to weather sluggish economic growth and the political unrest in the city.
The Hang Seng Index added 0.9 per cent, or 231.22 points, to 26,797.95 at the close on Thursday, its best performance since October 11. The Shanghai Composite Index slipped less than 0.1 per cent to 2,940.91.
With no clear signs in sight of how to resolve the anti-government protest that has scared away tourists and forced closures of shops in the former British colony, bargain hunting prevailed the market as traders bet that the extremely low valuations would resist the gyration on the market. A Bloomberg gauge of Hong Kong-traded 20 banks was valued at 5.3 times earnings, half as expensive as the multiple for Hang Seng gauge, Bloomberg data showed.
“Optimistic outlook for net interest margin expansion as well as perceived improvement in the trade front are giving banking shares support,” said Gerry Alfonso, director of the international department at Shenwan Hongyuan Group.
HSBC Holdings gained 1.1 per cent to HK$61.85. Industrial and Commercial Bank of China rose 1.8 per cent to HK$5.60 and China Construction Bank climbed 1 per cent to HK$6.35.
