HK Stocks Close 0.88% Higher on Mainland Policy Hopes

Hong Kong stocks rose 115.01 points, or 0.88 percent, to close at 13,178.90 on Thursday, on hopes that the mainland will announce new stimulus measures to boost the economy.

Turnover jumped to 52.83 billion HK dollars (6.8 billion U.S. dollars) from 36.48 billion HK dollars (4.7 billion U.S. dollars) on Wednesday.

The market had risen sharply on continued hopes the mainland will announce new stimulus measures to boost the economy, and analysts said these hopes will help support the blue-chip index in the coming weeks.

However, investors viewed the disappointing earnings of computer maker Lenovo and retailer Esprit as a sign that other Hong Kong firms will also report worse-than-expected results, trimming gains in the benchmark index after it surged to a high of 13,492.53 points earlier in the session.

Lenovo's net loss was wider than the average 58 million U.S. dollars loss forecast by analysts surveyed by Dow Jones Newswires. Lenovo ended the session down 2.7 percent at 1.46 HK dollars, reversing a gain of 2.7 percent earlier in the session. Still, analysts said hopes for fresh market-boosting measures in the mainland will likely drive investor demand in coming sessions, giving the Hang Seng Index more room for further gains.

Conglomerate Citic Pacific was among the day's biggest blue-chip gainers after several newspapers reported that it approached China's sovereign wealth fund to take a 50 percent stake in its unit, Citic Capital Holdings Ltd., to raise funds for the company. It ended up 5.4 percent at 9.70 HK dollars.

Property developers continued to suffer from concerns of weakening housing demand and negative homeowner equity. DBS Vickers Director Peter Lai said he expects the sector to under perform the broad market in the near term.

"The trend is not going to change, as property prices are expected to fall more, with cases in negative equity mortgages tipped to rise further," said Lai.

Cheung Kong fell 2.6 percent to 64.60 HK dollars, Sun Hung Kai Properties declined 2.5 percent to 62.90 HK dollars, and Henderson Land was down 2.2 percent at 26.95 HK dollars. (One U.S. dollar =7.7465 HK dollars)

Source: Xinhua