- City’s financial markets to be closed Friday for a holiday
- HSBC and other companies with links to Europe rebound
Hong Kong stocks jumped the most in a month, erasing a quarterly loss, as they extended a recovery from the selloff following the U.K.’s vote to leave the European Union.
The Hang Seng Index added 1.8 percent, taking its gain since March 31 to 0.1 percent. CK Hutchison Holdings Ltd. and HSBC Holdings Plc, among companies most closely tied to Europe, added to Wednesday’s rebound as anxiety over Brexit abated. Kweichow Moutai Co. rose to a record as it paced an advance by mainland consumer shares, while the Shanghai Composite Index slipped 0.1 percent, capping a second quarterly drop.
Speculation that global policy makers will act to contain the fallout from last week’s British referendum has spurred a rebound in global equities after the shock result wiped off nearly $4 trillion from stock markets around the world. Bank of England Governor Mark Carney will on Thursday speak to members of the press and the finance industry in a message of reassurance. The recovery in Hong Kong stocks over the past two days has been paced by exporters and companies with strong business ties to Europe.
“The one-off impact of Brexit is over,” said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai. “Even if the event causes extreme volatility in financial markets, central banks around the world will provide liquidity to limit the impact.”
The Hang Seng Index climbed to 20,794.37 at the close. The Hang Seng China Enterprises Index jumped 1.7 percent, narrowing its first back-to-back quarterly loss in three years to 3.2 percent. Hong Kong’s markets will be closed on Friday for a public holiday. The Shanghai Composite fell to 2,929.61 at the close, halting a three-day rally.
China’s bid for greater influence in global financial markets will benefit from the U.K.’s decision to leave the European Union, Mark Mobius, executive chairman of Templeton Emerging Markets Group, said in an interview in London on Wednesday. Asia will be seen as relatively more desirable because it’s largely isolated from Europe’s turmoil, he said.
HSBC, the London-based lender with the second-highest weighting in the Hang Seng Index, gained 0.9 percent, trimming its loss since the Brexit vote to 6.8 percent. Standard Chartered Plc rose 0.7 percent and CK Hutchison advanced 2.1 percent, also paring their respective declines after the U.K. referendum as both rose for a second day.
China Shenhua Energy Co., the nation’s largest coal producer, was the Hang Seng Index’s best performer during the second quarter with a 17 percent advance. Real estate companies Wharf Holdings Ltd. and Link REIT rallied at least 11 percent, while Lenovo Group Ltd. was the quarter’s worst performer as it sank 23 percent.
Industrial companies have been the biggest decliners in mainland China since the beginning of April, with Xiamen C & D Inc., which has business interests in ports and trading, sliding 31 percent. The CSI 300 Index and the Shanghai Composite lost at least 2 percent during the quarter.
Consumer-staples companies climbed the most, as liquor makers Kweichow Moutai percent and Wuliangye Yibin Co. rallied at least 16 percent on optimism about a recovery in their sales. In Thursday’s trading, Kweichow Moutai added 1.3 percent, while Wuliangye gained 1.1 percent.
China is due to release June economic data starting Friday. The official manufacturing purchasing managers’ index will probably show a reading of 50, the dividing line between expansion and contraction, according to the median of estimates in a Bloomberg survey. That compares with 50.1 in May.
— With assistance by Shidong Zhang