Markets

Hong Kong shares close 0.52 percent higher

HONG KONG : Hong Kong shares gained 0.52 percent Wednesday as markets await news of whether a concrete plan to tackle t

Published October 26, 2011 Updated October 26, 2011 12:29pm

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By Imad Uddin

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The benchmark Hang Seng Index rose 98.34 points to 19,066.54 on turnover of HK$63.95 billion ($5.14 billion). The index closed above 19,000 for the first time since the end of September and has risen six percent since Thursday.

The market was also given a boost by a strong showing in Shanghai, which rose on hopes China might reverse its credit tightening after Premier Wen Jiabao said economic policy needed "fine-tuning".

"Hong Kong stocks and A-shares have been outperforming lately on easing concerns about a hard landing in China," said Daniel So, a strategist at SHK Financial.

"As long as the subsequent EU summit doesn't surprise negatively, local stocks may rally further."

European leaders are due to meet later Wednesday to agree a final plan to find a solution to the debt crisis, which is threatening to tip the world into another recession.

Bank of Communications added 2.4 percent to HK$5.07, China Life rose 2.1 percent to HK$18.76, ICBC was up 1.6 percent at HK$4.57 and Bank of China rose 1.1 percent to HK$2.85.

Bucking the day's gains, trading firm Li & Fung fell 0.9 percent to HK$13.96 on concerns over Europe's debt woes. The company has significant exposure to European markets.

Shanghai ended up 0.74 percent. The composite index, which covers both A and B shares, was up 17.81 points at 2,427.48 on turnover of 98.6 billion yuan ($15.5 billion).

Wen said Tuesday that China will make small changes to macroeconomic policy "at an appropriate time to an appropriate degree", though he still insisted controlling inflation is a priority.

"What Wen said had some impact on a psychological level, but I think we should still be cautious to see whether something more concrete will emerge," Li Bin, an analyst at Guolian Securities, told AFP.

Media companies extended gains on government pledges to develop the entertainment industry, following a key Communist Party meeting last week that vowed to preserve "cultural security" and expand soft power.

China Television Media gained 3.1 percent to 17.00 yuan and Hunan TV & Broadcast Intermediary surged 5.4 percent to 28.23 yuan.

Cement makers rose on expectations of increasing demand as the government builds more low-cost housing.

Tangshan Jidong Cement was up 3.8 percent to 17.55 yuan while Anhui Conch Cement rose 2.1 percent to 19.56 yuan.

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