Shares rise as global slowdown fears ease
Updated: 2008-08-30 07:18
By Joey Kwok(HK Edition)
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Hong Kong shares rose 1.38 percent on Friday as fears of a global economic slowdown eased after the US reported a better-than-expected GDP growth on Thursday.
The benchmark Hang Seng Index (HSI) gained 289.6 points to end at 21,261.89. The turnover was HK$63.44 billion.
Compared with a week ago, the shares jumped 4.3 percent, the best weekly performance in more than four months. But August was still a gloomy month for the local market, which slumped 6.5 percent as a whole.
Kenny Tang, director of Tung Tai Securities, attributed the Friday gain to stronger-than-expected US economic data, but he said the shares may have difficulty vaulting over its 20-day moving average level, or 21,571 points.
On Thursday, the US announced that its GDP grew 3.3 percent in the April-June period, beating earlier government estimate of 1.9 percent.
The figure soothed investors' worry that the global economy may slip into a significant slowdown or even recession, thus driving the capital back to the stock markets worldwide.
Looking into September, Tang said Hong Kong shares may do better, though "fears over economic outlook will continue".
The Hang Seng Index may fluctuate between 20,800 and 21,600 points in the first few days of next month, supported by handsome corporate earnings, he said.
On Friday, HSBC Holdings, the largest market mover in Hong Kong, soared 2.75 percent or HK$3.3 to HK$123.5.
Esprit, after reporting its disappointing annual earnings, tumbled 1.52 percent or HK$1 to HK$65. Its shares, at one time, shed as much as 20 percent to a two-year low of HK$64.5 on Thursday.
China Light and Power (CLP), Hong Kong's biggest power supplier, dived 3.57 percent or HK$2.35, to HK$63.50, the lowest in almost three months. The performance was dragged down by the energy agreement signed by the SAR government and mainland energy producers.
The mainland producers have agreed to extend gas and electricity supply to the territory for a further 20 years, threatening the CLP's plan of building a liquefied natural gas terminal.
Bank of China (Hong Kong), the city's largest publicly traded bank by assets, fell 3.3 percent or HK$0.60 to HK$17.50. The bank posted a 5 percent decrease in its first-half profits on Thursday, due to large provisions for US subprime-related investment losses.
China Mobile, the world's biggest mobile carrier in terms of both market value and subscribers, dipped to HK$89.6 on Friday, following a 6.3 percent plunge on Thursday.
Sun Hung Kai Financial strategist Castor Pang said China Mobile's 45 percent growth in its first-half profits "failed to meet investors' expectations", while Tang cited the sluggish outlook on the firm, dogged by fiercer competition and slow progress in 3G services, as a major factor.
(HK Edition 08/30/2008 page2)