Connect to share and comment

Hong Kong, Shanghai stocks close higher

PlacardEnlarge
(Globalpost/GlobalPost)

Hong Kong and Shanghai stocks rose on Tuesday after Chinese inflation came in below forecasts, easing concerns lawmakers will introduce fresh tightening measures.

In Hong Kong the benchmark Hang Seng Index climbed 0.70 percent, or 152.29 points, to end at 21,870.34 on turnover of HK$57.35 billion ($7.40 billion).

Beijing unveiled data Tuesday showing inflation at 2.1 percent in March, well down from the 10-month-high 3.2 percent seen the month before and below forecasts for 2.4 percent.

The news eased investor concerns that another high figure would prompt authorities to tighten monetary policy further.

"Markets were overly worried when headline CPI inflation jumped to 3.2 percent in February, so today's reading will definitely help alleviate the inflation and monetary-tightening concerns," Bank of America Merrill Lynch economist Lu Ting said in a note, according to Dow Jones Newswires.

Chinese shares have suffered in recent months on concerns about the world's number two economy, while the recent spike in inflation fuelled expectations the government would tighten monetary policy.

"The market has three main concerns about the Chinese economy; growth recovery is faltering, inflation is picking up, and the PBOC's (central bank) liquidity draining. All of these concerns are a bit overdone, in my view," said Hannah Li, senior equity analyst at Sun Hung Kai Financial.

Li added that upcoming data on new loans, fixed asset investment, retail sales and economic growth will prove investors have been too pessimistic and said the market will likely rebound further.

Among leading stocks China Life rallied 4.4 percent to HK$20.10, while Geely Auto closed up 3.4 percent at HK$3.61 and Baoxin Auto surged 11.7 percent to HK$6.14. Footwear maker Belle rose 4.4 percent to HK$13.30.

Chinese shares closed 0.64 percent higher. The benchmark Shanghai Composite Index rose 14.19 points to 2,225.78 on turnover of 73.1 billion yuan ($11.8 billion).

Financials led the gains. Industrial Securities jumped 4.87 percent to 11.41 yuan and New China Life Insurance gained 3.73 percent to 23.11 yuan.

Tourism shares and airlines rebounded on bargain-hunting after losses Monday on worries of an outbreak of bird flu. China International Travel Service rose 2.06 percent to 30.15 yuan, while China CYTS Tours Holding gained 1.79 percent to 14.22 yuan.

Flag carrier Air China rose 0.78 percent to 5.19 yuan and China Eastern Airlines added 0.67 percent to 3.02 yuan.

dan/sm

http://www.globalpost.com/dispatch/news/afp/130409/hong-kong-shanghai-stocks-close-higher-0