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Friday, September 2, 2016, 18:41

Stocks hit 10-month high

By Duan Ting

Hong Kong stocks hit a 10-month high on Friday. Market experts expect the stock market could potential hit 24,600 points in the rest of the year as the second stock connect will probably be launched in November and the US Federal Reserve hike is less expected to happen soon.

The benchmark Hang Seng Index (HSI) rose 104.36 points or 0.45 percent to close at 23,266.7 points, hitting a 10-month high, with one-day turnover reaching HK$80.67 billion. The Hang Seng China-Affiliated Corporations Index (Red Chip) increased 32.42 points or 0.83 percent to close at 3,936.99 and the Hang Seng China Enterprises Index surged 80.8 points or 0.84 percent to finish at 9,686.88.

The benchmark index gained 81 points or 0.4 percent to finish the morning trade at 23,243. Half-day market turnover amounted to HK$36.338 billion.

According to Sam Chi-yung, senior strategist at South China Financial Holdings, the HSI is in its high position now. He explained that the surging of traditional stocks’ and Chinese mainland banks’ share prices dragged up the performance of the benchmark index, while the fact the component stocks included in the HSI will be reviewed next Monday and the Shenzhen-Hong Kong Stock Connect without quota limitation is probably going to be opened in November this year are good news to boost the market.

Sam added that even though the employment situation in the US has improved recently, the manufacturing industry is still struggling, thus the US hike is less expected to happen soon.

Due to the factors mentioned above, the benchmark index in the best case will rise to 24,600 points, Sam said.

US employment growth likely moderated in August after two straight months of hefty gains, but was probably still strong enough to push the Federal Reserve to raise interest rates later this year, according to a business insider.

The US Markit PMI manufacturing index declined to 52 for August from the flashing reading of 52.1 and a final 52.9 in July – slightly below market expectations.

As for the Chinese mainland, the Shanghai and Shenzhen stock markets opened slightly down in the morning trade. After the afternoon trading session, the Shanghai Composite Index gained 0.13 percent to close at 3,067.35. The Shenzhen Component Index faded 0.27 percent to finish at 10,640.42. The CSI 300 Index lifted 0.38 percent at close to 3,314.11. The ChiNext Index dipped 0.48 percent to 2,170.86. Turnover of the Shanghai and Shenzhen bourses amounted to 430.91 billion yuan ($54.6 billion).

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