Hong Kong stocks are set to kick off the third trading month of the year on a positive note Tuesday, as China’s surprise announcement late Monday to ease banks’ required reserves
The Hang Seng Index futures spot March contract rose 0.63 per cent or 121 points to 19,178 in the pre-trade session Tuesday morning, while the Hang Seng China Enterprises Index futures gained 1.20 per cent or 95 points to 8,030.
The rise follows the People’s Bank of China’s decision to cut the reserve requirement ratio or the amount of cash banks are required to hold in reserves by 0.5 percentage point. The cut is effective Tuesday, and is the fifth time the PBOC has cut its RRR since February 2015 as it seeks to kick-start its slowing economy. The move is expected to pump 700 billion yuan (HK$830.5 billion) of new lending into the economy.
In New York trade on Monday all three major US indices closed down, even as oil prices ticked higher. The Dow Jones Industrial Average finished 0.74 per cent or 123.47 points lower at 16,516.50, the S&P 500 ended 0.81 per cent or 15.82 points down at 1,932.33. Meanwhile, the Nasdaq Composite ended down 0.71 per cent or 32.52 points at 4,557.95.
In Asian trading on Tuesday morning, Tokyo’s Nikkei 225 was little changed, easing 0.08 per cent or 12.49 points to 16,014.27.
Almost all Hong Kong-listed companies with American Depository Receipts (ADRs) traded in the US saw them close slightly higher than their equivalent Hong Kong closing prices on Monday after conversion into the local currency. HSBC’s ADR closed at HK$49.45, down from the HK$49.65 seen at the Hong Kong close, Lenovo rose from HK$6.49 at the Hong Kong close to HK$6.53, Sinopec’s ADR increased from HK$4.33 to HK$4.43 and Petrochina rose from HK$4.99 to HK$5.10.