The Hong Kong markets rose on Wednesday amid hopes that an economic stimulus package will be agreed upon in the United States, as well as progress on vaccine roll-outs.
The Hang Seng Index gained 1 per cent to 26,460.29, its biggest daily increase in more than a month, after declining for two consecutive days. The Shanghai Composite, however, was little changed on the day, after slipping 0.1 per cent on Tuesday.
Hopes that a US$1.4 trillion US spending package could be hammered out this week increased after House Speaker Nancy Pelosi invited other top congressional leaders to meet late on Tuesday.
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“The markets are wholeheartedly banking on that deal to provide the ultimate footbridge to the vaccine roll-outs,” said Stephen Innes, chief global markets strategist at Axi.
The US Food and Drug Administration on Tuesday stated that the vaccine developed by Moderna was safe and effective for use on adults, positioning the drug for authorisation as soon as this week. The US also continued to expand the roll-out of the Covid-19 vaccine developed by Pfizer and BioNTech.
Wall Street benchmarks gained overnight. The Dow Jones Industrial Average gained 1.1 per cent, while the S&P 500 and the Nasdaq Composite added 1.3 per cent.
Of the Hang Seng Index’s 52 constituents, 40 gained on Wednesday. Pharmaceuticals led gains among blue chips. The old shares of coronavirus drugs research firm WuXi Biologics gained 6 per cent, while its new shares, which emerged after a stock split last month, gained 1.2 per cent. Sino Biopharmaceutical also rose, climbing 2.4 per cent. It announced a US$515 million investment in Sinovac’s Covid-19 vaccine unit last week. The first batch of a million of Sinovac’s vaccines will arrive in Hong Kong next month, Carrie Lam Cheng Yuet-ngor, the city’s leader, said on Friday.
Shanghai Fosun Pharmaceutical, which has exclusive rights for the BioNTech vaccine in mainland China, Hong Kong and Macau, soared 8 per cent to HK$39. The Chinese drug maker announced on Wednesday that it had secured 100 million doses of the coronavirus vaccine for use in the mainland in 2021, according to a filing to the stock exchange. CSPC Pharmaceutical added 2.1 per cent.
Meanwhile, major US indices compiler MSCI said on Tuesday that it would remove 10 Chinese securities that President Donald Trump had blacklisted for suspected ties with the Chinese military.
Shenzhen-listed surveillance giant Hangzhou Hikvision, which is among the companies to be removed from MSCI indices, fell 1.5 per cent to 46 yuan on Wednesday. In Shanghai, supercomputer manufacturer Dawning Information Industry and satellite manufacturer China Spacesat, both of whom have also been blacklisted, fell 2.2 per cent and 1.4 per cent, respectively.
The US has blacklisted 35 companies worth at least 3 trillion yuan (US$458 billion) in market value. China’s domestic market is worth US$10 trillion. FTSE Russell and S&P DJI have also announced that they will axe eight to 10 affected companies from December 21.
Separately, Hong Kong-listed shares of semiconductor maker SMIC plunged by as much as 9.6 per cent before paring losses and declining by 4.9 per cent to HK$20.20 for the day. Trading in the stock was halted in the morning session after the company announced a boardroom change late on Tuesday. Its Shanghai-listed A-shares continued trading through the day, paring losses of as much as 9.8 per cent to a decline by 5.5 per cent to 55.20 yuan.
Three companies began trading on the Hong Kong and Shanghai bourses. Blue Moon Group, the detergent maker backed by Asian private-equity manager Hillhouse Capital, gained 13.1 per cent to HK$14.88 from its listing price of HK$13.16.
In Shanghai, Wuxi Hyatech, which manufactures aircraft parts, soared 355.1 per cent to 37.18 yuan from its initial public offering price of 8.17 yuan. Bestechnic Shanghai, which designs chips for audio devices, gained 123.4 per cent to 362 yuan from its listing price of 162.07 yuan.
Markets in Asia-Pacific also gained. South Korea’s Kospi added 0.5 per cent, while Japan’s Nikkei 225 gained 0.3 per cent. Australia’s S&P/ASX200 rose 0.7 per cent.
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