HONG KONG: – Hong Kong stocks edged up Wednesday after a two-day sell-off, while Shanghai rebounded strongly from the previous day’s slump as more weak Chinese inflation data fuelled hopes for further easing measures.
The Hang Seng Index added 0.16 percent, or 38.69 points, to 23,524.52 on turnover of HK$109.93 billion ($14.18 billion).
In Shanghai the composite index, which slumped 5.43 percent Tuesday, surged 2.93 percent.
China’s National Bureau of Statistics said inflation eased to a five-year low of 1.4 percent in November, down from 1.6 percent in October and below forecasts of 1.6 percent.
The figure is the latest showing the world’s number two economy is under pressure and has fuelled hopes Beijing will introduce further measures to prop it up.
While the People’s Bank of China unveiled a surprise interest rate cut last month, the growing list of weak readings has fed speculation that leaders will soon announce a cut in the amount of cash banks must keep in reserve and other stimulus measures.
Wednesday’s gains came despite a largely negative lead from Wall Street where investors were spooked by Greece’s decision to call a snap presidential election two months early, raising fears of fresh instability in the struggling economy.
The Dow fell 0.29 percent and the S&P 500 dipped 0.02 percent, but the Nasdaq added 0.54 percent.
The best performing stock on the Hang Seng on Wednesday was China General Nuclear Power, which surged 19.06 percent to HK$3.31 on its debut after raising more than US$3 billion in its initial public offering last week — making it the city’s biggest this year.
Among other shares, Power Assets Holdings climbed 1.36 percent to HK$74.50, energy giant CNOOC added 1.59 percent to HK$10.22 and Tsingtao Brewery was 0.18 percent higher at HK$55.10.
Hong Kong Exchanges & Clearing jumped 0.96 percent to HK$178.60 and Hang Seng Bank was 0.08 percent up at HK$127.00, but Cathay Pacific Airways fell 1.71 percent to HK$17.24.
In mainland China the Shanghai market added 83.74 points to 2,940.01 on turnover of 535.0 billion yuan ($86.7 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 3.50 percent, or 49.14 points, to 1,452.53 on turnover of 304.6 billion yuan.
Hopes for fresh help for the economy has fuelled a rally of about 20 percent in the Shanghai market since the middle of last month but Tuesday saw a huge sell-off as profit-taking set in.
“The weak inflation data sparkled hopes for more economic policy easing,” Central China Securities strategist Zhang Gang told AFP.
“Investors are also betting on the reform and policy stimulation from the recent economic session would help boost market performance.”
Environmental protection companies rose on hopes more supportive measures would speed up industry development.
In Shanghai, Tianjin Capital Environmental Protection Group surged by its 10 percent upper limit to 9.89 yuan while Zhejiang Feida Environmental Science & Technology Co also jumped 10 percent to 14.95 yuan.
Banks rebounded after Tuesday’s plunge. Shanghai-listed bank giant Industrial and Commercial Bank of China gained 2.38 percent to 4.30 yuan while Shenzhen-listed Ping An Bank added 3.50 percent to 14.19 yuan.