Mainland stocks rally to seven-month high in HK
Mainland stocks traded in Hong Kong climbed to a seven-month high on Monday, led by developers and building-materials makers, after better-than-expected US jobs data bolstered confidence in the world’s biggest economy. Coal shares rallied in mainland trading.
The Hang Seng China Enterprises Index advanced 1.6 percent in Hong Kong, where the local currency is pegged to theUS dollar. China Vanke Ltd climbed for a fifth straight day to pace gains for a measure of developers. The Shanghai Composite closed above 3,000, as an increase in coal prices led energy producers higher.
An index tracking the premium of mainland shares over Hong Kong peers fell to its lowest level since October.
Upbeat US jobs data on Friday helped push the S&P 500 Index to a record high. The Bank of England last week cut its key rate for the first time in more than seven years and boostedmonetary stimulus to ease a slump following the UK’s vote to exit the European Union. China’s overseas shipments declined 4.4 percent in dollar terms in July, data showed on Monday, indicating sluggish external demand.
“H shares have more global participants, so the market tends to do well at a time when global central banks are releasing liquidity and US stocks rose to records,” said Wu Kan, a fund manager at JK Life Insurance Co in Shanghai. Wu said the gains for mainland shares were a “technical” rebound, adding he would reduce holdings if they rose further.
The Hang Seng China Enterprises Index closed at 9,276.56, while the Shanghai Composite climbed 0.9 percent to 3,004.28. The Hang Seng Index gained 1.6 percent, finishing at its highest level since November.
The H share index has now lost 4 percent this year, while theShanghaiCompositeis still down 15 percent. The gap has sent a measure of correlation between the two gauges to the lowest level since 2007, signaling foreigners may be more optimistic in their outlook for Chinese equities than local investors.
Vanke advanced 1.5 percent inHongKong to its highest close since May 4, and China Resources Land Ltd climbed to a four-month high. A measure of property developers in the city increased for a third day.
“Capital has been flowing into markets in Asia including Hong Kong after Brexit and the UK cut interest rates,” said KenChen, an analyst withKGI Securities Co in Shanghai.
Investors check stock prices at a brokerage in Fuyang, Anhui province.