China stocks bounced above a key level in Hong Kong Wednesday on encouraging news from China and abroad.
Hong Kong’s Hang Seng Index rose 1.1% to 20,075 in higher turnover. The index had been stuck below 20,000 since mid-August when hopes for imminent monetary easing in Europe faded. The index of Chinese stocks climbed 1.2% to 9,489.
On the European front investors were relieved when the German high court opened the door for a rescue fund for debt-ridden regional economies. The decision won’t solve the massive debt problem, but was a necessary step in the process. More news is expected from a meeting of the U.S. Federal Reserve Board this week, with investors hoping for another round of quantitative easing.
China added to the feel-good atmosphere Wednesday by announcing in would launch new measure worth RMB 100 billion to boost its sagging economy. Details aren’t available yet, but Francis Lun, managing director at Lyncean Securities, said some of the money may go to higher rebates for the hard-hit exporting sector. That would help companies like Foxconn (FXCNY).
China Railway Construction (CRWOY) and other construction companies will also likely benefit, he told Equities. End
Hong Kong Blue Chips: +218, +1.1%, to 20,075, 09-12-12, Hang Seng Index
Chinese Stocks in Hong Kong: +111, +1.2, to 9,489, 09-12-12, HSCE Index
Shanghai Stocks: +6, +0.3% to 2,127, 09-12-12, Shanghai Composite Index.
Chinese Stocks in the U.S.: +5.9, 364.4, 09-11-12, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong blue chips regained the 20,000 level, following Asian and Mainland markets higher. Zoomlion (ZLIOY) and other construction companies rose. KGI Research
Quotable: “We expect the Hang Seng Index to move between 19,200 and 20,300 in September.” Guoco Capital. 9-11-12
Chinese Company to Watch: “BUY China State Construction (CCOHY) on better-than-expected contract acquisition.” Guoco Capital. 9-11-12
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