Hong Kong's benchmark stock index rose nearly 2 per cent to its highest closing level in five weeks on Monday, as fears of a global trade war, and faster US rate hikes eased.
The rally was lead by financial firms as investors expect improving profitability at Chinese lenders and insurers listed in Hong Kong. Brokerage China Investment Securities (HK) also attributed the market strength to “expectations of foreign capital inflows and China's economic restructuring.”
The Hang Seng index rose 1.9 per cent to 31,594.33, while the China Enterprises Index gained 2.1 per cent to 12,697.31 points.
Inflation worries faded on Friday after US data showed non-farm payrolls jumped by 313,000 jobs last month, but annual growth in average hourly earnings slowed to 2.6 per cent after a spike in January. Trade war fears also ebbed further as the United States opened the way for more exemptions from its steel and aluminium tariffs on Friday, after pressure from allies and intense lobbying from lawmakers.
The sub-index of the Hang Seng tracking energy shares rose 1.9 per cent while the IT sector rose 2.58 percent, the financial sector was 2.38 per cent higher and the property sector gained 0.92 per cent.
The top gainer on Hang Seng was China Construction Bank Corp up 3.66 percent, while the biggest loser was Hengan International Group Company Ltd, which was down 0.90 per cent. China's main Shanghai Composite index closed up 0.58 per cent at 3,307.1656 points while its blue-chip CSI300 index ended up 0.46 per cent. Around the region, MSCI's Asia ex-Japan stock index was firmer by 1.39 per cent while Japan's Nikkei index closed up 1.65 per cent. The yuan was quoted at 6.3237 per U.S. dollar at 08:27 GMT, 0.19 per cent firmer than the previous close of 6.336.
About 2.24 billion Hang Seng index shares were traded, roughly 84.8 per cent of the market's 30-day moving average of 2.64 billion shares a day. The volume traded in the previous trading session was 1.52 billion. At close, China's A-shares were trading at a premium of 25.81 per cent over the Hong Kong-listed H-shares.