Hong Kong stocks rise as US Fed indicates 'patience' on interest rates

Hong Kong's main Hang Seng index ended higher on Thursday, while China's H-shares index also closed firmer tracking gains in China market, after the U.S. Federal Reserve pledged to be patient with further interest rate hikes. At the close of trade, the Hang Seng index was up 299.62 points or 1.08 per cent at 27,942.47. The Hang Seng China Enterprises index rose 1.27 percent to 11,035.73.

The Hang Seng Index jumped 8.1 per cent this month, while the Chinese Enterprises Index rose 9 per cent, both marking their biggest monthly percentage gain since January 2018. The sub-index of the Hang Seng tracking energy shares closed 1.2 per cent firmer, while the IT sector ended up 1.21 per cent, the financial sector ended 1.37 per cent higher and the property sector closed up 1.13 per cent.

The U.S. Federal Reserve said it would be "patient" before making any further moves amid a suddenly cloudy outlook for the U.S. economy due to global growth risks and impasses over trade and government budget negotiations. The top gainer on the Hang Seng was Galaxy Entertainment Group Ltd, which gained 5.68 per cent, while the biggest loser was China Mengniu Dairy Co Ltd, which dropped 2.81 per cent.

Chinese factory activity contracted for a second straight month in January, data showed on Thursday, pointing to further strains on the economy that could heighten risks to global growth. Official data on Thursday also showed that growth in China's services industry picked up for a second straight month in January, reflecting some pockets of strength in an economy that is cooling under pressure from weak demand at home and abroad.

China's main Shanghai Composite index closed up 0.35 per cent at 2,584.57 points, while the blue-chip CSI300 index ended up 1.05 per cent. Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.81 per cent, while Japan's Nikkei index closed up 1.06 per cent. The yuan was quoted at 6.704 per U.S. dollar at 0810 GMT, 0.17 per cent firmer than the previous close of 6.7156.

The top gainers among H-shares were New China Life Insurance Co Ltd up 9.39 per cent, followed by China Gas Holdings Ltd, gaining 3.96 per cent and CSPC Pharmaceutical Group Ltd, up by 3.7 per cent. The three biggest H-shares percentage decliners were ZhongAn Online P&C Insurance Co Ltd, which was down 1.82 per cent, Great Wall Motor Co Ltd, which dropped 1.12 per cent and China Telecom, down by 0.70 per cent.

About 2.29 billion Hang Seng index shares were traded, roughly 150.2 per cent of the market's 30-day moving average of 1.53 billion shares a day. The volume traded in the previous trading session was 1.88 billion. At the close, China's A-shares were trading at a premium of 17.11 per cent over the Hong Kong-listed H-shares. The price-to-earnings ratio of the Hang Seng index was 10.79 as of the last full trading day while the dividend yield was 3.4 per cent.