Hong Kong stocks rallied 9.61 percent Friday, its biggest gain in eight months, but analysts and traders said it was too early to say whether the local equities market has fully recovered.
Hong Kong's benchmark Index on Friday almost recouped all the losses in former three sessions this week, following Wall Street's overnight rally and Chinese mainland's rebound Friday on news of latest market-boosting measures.
People walk past an electronic stock price indicator board in Hong Kong, south China, on Sept. 19, 2008. Hong Kong stocks rallied 9.61 percent Friday, its biggest gain in eight months, following Wall Street's overnight rally and Chinese mainland's over 9 percent rebound Friday on news of latest market-boosting measures. (Xinhua/Lui Siu Wai) But analysts said the index will likely remain in a wide 16,000-20,000 range in the near term as uncertainties surrounding global economic growth and the health of major financial institutions continue to loom.
The Dow Jones Industrial Average rallied 410.03 points or 3.86 percent overnight, boasted on news that worldwide leading central banks injecting multi-billion U.S. dollars capital to ease liquidity in strained markets.
The benchmark Shanghai Composite Index closed up nearly 9.46 percent, the biggest one-day percentage gain in seven years, on news that Chinese mainland government launches a series of major rescue market-boosting efforts.
The central government on Thursday announced to cancel the share trading stamp tax on stock purchase, effective on Friday, while the stamp tax on share selling remained unchanged at 0.1 percent.
Central Huijin Investment said it began buying ICBC, China Construction Bank and Bank of China Thursday, sending the three banks' share prices steeply up in Hong Kong market which led Friday's blue-chip gains.
A woman walks past an electronic stock price indicator board in Hong Kong, south China, on Sept. 19, 2008. Hong Kong stocks rallied 9.61 percent Friday, its biggest gain in eight months, following Wall Street's overnight rally and Chinese mainland's over 9 percent rebound Friday on news of latest market-boosting measures. (Xinhua/Lui Siu Wai) Analysts said Bank of China's rally was also helped by its purchase of a 20 percent stake in France's Compagnie Financiere Edmond de Rothschild.
However, the strong gains in regional stock markets failed to allay concerns that the turmoil in the global financial markets will continue to exert downward pressure on local shares, analysts said.
"Investors should be taking today's opportunity to trim some holdings rather than chasing into a rally," said Ben Kwong, chief operating officer at KGI Asia, as the bear market isn't over.
Peter Lai, a director at DBS Vickers Securities, said there hasn't been enough change in the market and companies' fundamentals to warrant optimism on their outlook.
"Trading remains driven by news and sentiment, so I would expect index to continue to swing wildly in the near term," he said.
Source: Xinhua
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