Hong Kong stocks close 2.43% higher on Wall Street rebound

Written by Meenaa on Saturday, November 15th, 2008

HONG KONG, Nov. 14 (Xinhua) — Hong Kong stocks rose 321.31 points, or 2.43 percent, to close at 13,542.66 on Friday, on overnight Wall Street rebound and hope of a interest rate cut in the mainland.

Turnover went down to 44.74 billion HK dollars from Thursday’s 51.79 billion HK dollars (6.69 billion U.S. dollars).

Despite Friday’s gain, the benchmark Hang Seng index is still down 4.9 percent for the week. Friday’s rise came after the Wall Street had its biggest one-day gain since Oct. 28, snapping a three-day losing streak. The Dow Jones Industrial Average rose 552. 59 points, or 6.67 percent, to 8,835.25 Thursday.

The Hang Seng China Enterprises Sub-Index, which tracks the movement of mainland-registered companies traded in Hong Kong, jumped 3.3 percent to 7,021.64 on hopes for an interest rate cut on the mainland.

“We expect the central bank of China will cut interest rates to facilitate the stimulus package,” said Ernie Hon, a strategist at ICEA Securities.

Mainland financial companies were buoyed by the rate cut hopes Friday. Bank of Communications rose 3.2 percent to 4.53 HK dollars, China Construction Bank jumped 2.2 percent to 4.14 HK dollars and Bank of China gained 2.9 percent to 2.14 HK dollars.

Property developer China Overseas rose 3.8 percent to 9.26 HK dollars as housing demand may rise if mortgage rates fall after the rate cut. Oil companies also rose following an overnight rebound in oil prices. Offshore oil producer CNOOC gained 4.3 percent to 6.00 HK dollars and PetroChina rose 4.1 percent to 5.83HK dollars.

Bucking the trend, steel-to-property conglomerate Citic Pacificslid 7.1 HK percent to 6.15 HK dollars after Goldman Sachs lowered its target price to 8.30 HK dollars from 12.50 HK dollars due to concerns over a share dilution after its parent exercises a convertible bond.

Analysts said the index will test 14,000 points next week, but they added that it will soon head downward because investor confidence is still weak.