Hong Kong stocks and other Asian markets defied a slump on Wall Street after US President Donald Trump halted stimulus talks until after the elections next month, but backtracked later saying he could sign a stand-alone bill to help ordinary Americans get immediate relief.
The Hang Seng Index rose 1.1 per cent to 24,242.86, extending gains for a fourth consecutive day.
Trump said on Tuesday that he had halted negotiations for a fourth stimulus package until after November 3. That came hours after US Federal Reserve chairman Jerome Powell warned that further government support was crucial for economic recovery of the world’s largest economy.
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“The markets were not too worried about there not being economic stimulus coming from the US. It’s just a matter of when,” said Stanley Chan, director of research at Emperor Securities.
“Investors seem to be focusing on the fact that Trump can continue to participate in the elections, and are looking ahead to his second presidential debate with Biden. The financial markets are starting to think that there isn’t too much of a problem with either one of them becoming the next US president, as long as the results of the election aren’t contested,” said Chan.
If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy? @MarkMeadows @senatemajldr @kevinomccarthy @SpeakerPelosi @SenSchumer
— Donald J. Trump (@realDonaldTrump) October 7, 2020
Major US benchmarks fell overnight. The Dow Jones Industrial Average shed 1.3 per cent, while the S&P 500 dropped 1.4 per cent and the Nasdaq Composite lost 1.6 per cent.
“The no stimulus correction in equity markets looks like a risky parity unwind, rather than a reassessment of growth prospects,” said Stephen Innes, chief global market strategist at Axi.
Stocks related to Apple rose, after the US tech giant announced on Tuesday that it would hold its largest product launch of the year on October 13.
AAC Technology, which makes miniaturised components used in iPhones, iPads and watches, rose 3.3 per cent.
Sunny Optical Technology, which produces smartphone lenses and is expected to become an Apple supplier, led blue chips with a 5.1 per cent increase.
Handset assembler BYD Electronics, which analysts expect to start supplying Apple as soon as this year, rose 2.3 per cent.
The Hang Seng Tech Index of 30 top technology stocks rose 2.2 per cent. HengTen Networks, a manufacturer of photographic and electrical products, led gains on the tech benchmark with an 8.5 per cent increase.
Semiconductor equipment manufacturer ASM Pacific rose 6.3 per cent, while China’s top chip maker SMIC added 2.5 per cent, extending its rebound from Tuesday.
Shares of Chinese developer Greentown China surged 12.1 per cent. The company reported that sales in September reached around 20.1 billion yuan (US$3 billion), up 69 per cent from the same period last month, in a filing to the exchange late on Tuesday.
Other mainland developers also gained. Agile Group rose 5 per cent, while Country Garden increased 3.1 per cent.
Hong Kong developers also rose. New World Development added 2.5 per cent, while Hysan Development gained 2.3 per cent. Sino Land also increased 1.7 per cent.
“Shares of Hong Kong property developers have gone down for quite a while. Without a large scale [Covid-19] outbreak, economic activities can continue, and money will start to flow back into stocks that have been at low levels,” said Chan.
The Hong Kong dollar touched the upper end of its trading band at HK$7.75 against the US dollar on Wednesday.
Nine constituent stocks of the Hang Seng Index fell.
JHBP or Genor Biopharma, a Shanghai-based drugs developer whose lead candidates include therapies for breast and blood cancers, rose 16.5 per cent to HK$27.95 from its HK$24 initial public offering price. Genor Biopharma, whose retail tranche was bought 1,248 times, was the third-biggest oversubscription in Hong Kong for deals larger than US$100 million, according to Bloomberg data.
Markets in most parts of Asia gained. South Korea’s Kospi rose 0.9 per cent while Australia’s S&P/ASX gained 1.3 per cent. Japan’s Nikkei 225 was little changed.
More from South China Morning Post:
- Hong Kong stocks extend rally for third straight day as Trump returns to White House after Covid-19 treatment
- Hong Kong stocks rise alongside Asian markets as investors focus on Trump’s improving health
- Hong Kong stocks end month in red amid US-China tensions despite signs of China economic recovery
- Donald Trump ends coronavirus relief talks amid stalemate with Nancy Pelosi
- Hong Kong’s Hang Seng Index has best day in a month driven by gains in HSBC, China economic data
This article Hong Kong stocks rise for fourth straight day after Trump calls off stimulus talks until after elections first appeared on South China Morning Post