Stocks rise on dollar weakness
Updated: 2010-11-03 07:10
(HK Edition)
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Most Hong Kong stocks rose, sending the Hang Seng Index (HSI) to its highest level in two weeks, as China Construction Bank Corp extended Monday's gains and the weak US dollar made the city's assets more attractive.
The HSI climbed 0.1 percent to 23,671.42 after falling as much as 0.4 percent. About four stocks rose for every three that fell on the 320-company Hang Seng Composite Index as the Dollar Index, which tracks the US currency versus those of six major trading partners such as the euro, fell 0.3 percent to 77.064 Tuesday.
"As the US dollar remains weak, it continues to be favorable to the stock market and for the fund flow," said Ben Kwong, chief operating officer at KGI Asia Ltd. "Investors still believe that the currency will remain weak. That is why there is no significant correction pressure either."
The Hang Seng China Enterprises Index gained 0.1 percent to 13,523.21.
China Construction Bank increased 2.2 percent to HK$7.81, the biggest positive contributor to the HSI. Morgan Stanley increased its 12-month price estimate to HK$9.05 from HK$8.50, citing rising earnings and the bank's loan loss provision levels.
The brokerage also raised its price estimate for China Citic Bank Corp to $6.66 from HK$6. China Citic climbed 1 percent to HK$5.84. Separately, the lender was raised to "buy" from "hold" at Royal Bank of Scotland Group Plc.
The US Federal Reserve will probably begin a new round of unconventional monetary easing this week by announcing a plan to buy at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News.
Policy makers meeting on Tuesday and today will restart a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed last week.
Futures on the Hang Seng Index increased to 23,677.
Bloomberg
(HK Edition 11/03/2010 page3)