Hong Kong stocks notch gains ahead of HSBC, Hang Seng Bank results

(SOUTH CHINA MORNING POST) Hong Kong stocks kicked off the trading week in a cautiously optimistic mode on Monday, as investors eyed important financial results due out at midday, while China markets strengthened to welcome the appointment of their new top regulator.

Hong Kong’s flagship Hang Seng Index was at 19,500.23 points by the midday break, 1.11 per cent higher than Friday’s closing. The Hang Seng China Enterprises Index of major H-share companies climbed 1.54 per cent to 8,237.54 points.

Hang Seng Index heavy weight HSBC Holdings, along with Hang Seng Bank, are scheduled to announce its latest financial results today.

Ahead of the result, HSBC shares were up 1.5 per cent, while Hang Seng Bank rose 1.1 per cent.

In China, the Shanghai Composite Index rose 2 per cent to 2,918.50 points in the morning session. while the Shenzhen index tacked on 1.69 per cent.

Investors reacted positively to news Liu Shiyu had replaced outgoing China Securities Regulatory Commission head Xiao Gang. Analysts said the timing of the announcement, ahead of the important legislative meetings in March, was also a positive.

“This shows Beijing is sending a signal that they are not sticking to a textbook, but will fix the major problem on the stock markets as soon as possible,” said Brett McGonegal, an independent financial commentator.

Financial stocks helped to lift the Shanghai Index, with insurer China Life rising 5.4 per cent to 21.27 yuan. Raw materials stocks saw dramatic improvement, with Baoshan Iron and Steel jumping 8.33 per cent and Aluminium Corporation of China surging 9.05 per cent.

Major indices in US and Europe ended mostly lower on Friday.

Crude Oil prices drifted lower by almost 4 per cent at the end of last week, failing to sustain a brief mid-week rally. West Texas Intermediate stood at US$29.64 a barrel this morning with the European benchmark Brent crude at US$33.01 a barrel.