HSI rises on China growth, dovish Fed

Local shares finished in positive territory on Thursday while their peers in the region headed in different directions, after the world’s second largest economy reported second quarter economic growth that came in slightly below forecast.

The Hang Seng Index opened 13 points higher, after US shares finished mixed following Federal Reserve chief Jerome Powell’s pledge that the central bank will keep its loose monetary policy until the country’s economic recovery is complete.

New data showing slower but solid economic growth on the mainland helped drive the local benchmark higher, up almost 400 points at one stage. But the upward momentum lost steam later and the blue-chip index ended the day up 208 points, or 0.8 percent, at 27,996.

Market turnover was HK$151.1 billion.

Mainland property-related stocks and financials outperformed. Property management firm CG Services surged 4.1 percent to become the winner of the day. Ping An Insurance jumped 3.7 percent. China Resources Land rallied 2.6 percent.

Tencent added 1.5 percent, while Alibaba advanced two percent, after a report said the tech giants may remove some restrictions preventing their customers from using the other’s services.

BYD Company slid 3.3 percent after a shareholder further cut its stake in the automaker.

Markets across the border also headed north, boosted by fresh liquidity as a reduction in the amount of cash mainland banks must hold in reserve came into effect.

The Shanghai Composite Index put on one percent, while the blue-chip CSI300 index rose 1.4 percent. The Shenzhen Composite index was 0.4 percent firmer.

Elsewhere, the Nikkei in Japan lost 1.2 percent as the coronavirus situation in Tokyo continued to cast a shadow on the upcoming Olympics there. But South Korea’s Kospi added 0.7 percent. Taiwan gained one percent. Australia trimmed 0.3 percent. Singapore edged down 0.4 percent.