Hong Kong shares show big gains

八月 15, 2011
Joe Chan

Hong Kong stocks rocketed 3.26 per cent as bargain hunting and gains on Wall Street created buying impetus.

The benchmark Hang Seng Index added 640.09 points to 20,260.10 on turnover of HK$71.00 billion ($A8.8 billion)) on Monday.

Commentators said bargain hunting was a driving force behind the rise, with the index having lost 12.6 per cent of its value since the start of the month.

"Valuation of the local stock market has become more attractive after the recent panic sell-off.

The Hang Seng Index is now trading at an undemanding valuation of around eight times projected 2011 earnings," said Kenny Tang, general manager of AMTD Financial Planning.

Chinese insurer Ping An led the pack, up 8.9 per cent to HK$67.65 on expectations of strong earnings, having lost 18 per cent since the beginning of August.

"The stock market should be buoyed well by solid first-half corporate earnings," said Sunny Wong, managing director for research of brokerage BOCI Securities, according to Dow Jones Newswires.

Companies with large exposure to Europe and the US were also up, with exporter Li & Fung adding 7.6 per cent to HK$13.82 and retailer Esprit climbing 5.3 per cent to HK$20.40.

Chinese shares closed up 1.30 per cent as concerns eased about overseas financial woes and domestic inflationary pressure, dealers said.

The Shanghai Composite Index ended up 33.60 points at 2,626.77 on turnover of 91.0 billion yuan ($14.2 billion).

"The A-share market is likely to trend upward as it’s less tied to the performance of the global markets this week and also on expectations that inflation peaked last month," Wang Weijun, an analyst from Zheshang Securities, told Dow Jones Newswires.

China’s consumer price inflation was 6.5 per cent in July.

Banks and insurers led the gains amid expectations of strong second-quarter earnings.