The Hong Kong stock market has moved higher now in back-to-back sessions, rising more than 335 points or 1.7 percent in the process. The Hang Seng finished just above the 18,520-point plateau, and now analysts are looking for another strong open when the market kicks off trade on Thursday.
The global forecast for the Asian markets is broadly positive following fairly upbeat news out of Europe. The European Central Bank maintained its key interest rates, keeping the main refi rate at 1 percent, while the European Commission also unveiled plans to avert massive banking failures in future. Adding to the positive sentiment are comments from Atlanta Federal Reserve President Dennis Lockhart, who said that the option of extending "Operation Twist" is still on the table. The European and U.S. markets were sharply higher and the Asian markets are expected to follow suit.
The Hang Seng finished sharply higher on Wednesday, supported by gains from the property stocks, oil companies and gold miners.
For the day, the index climbed 261.50 points or 1.43 percent to finish at 18,520.53 after trading between 18,320.61 and 18,521.57 on volume of 46.09 billion Hong Kong dollars.
Among the gainers, Sino Land spiked 4.1 percent, while New World Development surged 6.1 percent, China Resources Land climbed 3.1 percent, Wharf Holdings jumped 3.1 percent, CNOOC soared 3.8 percent, Zhaojin Mining jumped 10.8 percent and Zijin Mining collected 6.8 percent.
The lead from Wall Street is upbeat as stocks moved sharply higher on Wednesday, with traders expressing optimism about further stimulus from the world's central banks. The markets extended Tuesday's upward move, recovering further from the sell-off seen in recent weeks.
Much of the rally stemmed from the optimism about further stimulus following the Reserve Bank of Australia's interest rate cut on Tuesday - even as the European Central Bank announced its widely expected decision to leave interest rates unchanged following its monetary policy meeting.
Traders were also initially disappointed by ECB President Mario Draghi's remarks at a subsequent press conference, as they did not seem to indicate that the ECB was planning on providing further stimulus. However, Draghi later told reporters that the central bank stands "ready to act" if the economic situation continues to worsen.
Positive sentiment was also generated by Atlanta Federal Reserve President Dennis Lockhart, who said that extending "Operation Twist" remains a possibility. San Francisco Fed President John Williams also called it crucial that the central bank maintains in highly stimulatory monetary policy stance.
Stocks saw continued strength following the release of the Fed's Beige Book report, which said overall economic activity expanded at a moderate pace from early April to late May. While the Beige Book also said the economic outlooks remain positive, the Fed noted that contacts were slightly more guarded in their optimism.
The major averages saw further upside going into the close, ending the session at their best levels of the day as the Dow jumped 286.84 points or 2.4 percent to finish at 12,414.79, while the NASDAQ surged 66.61 points or 2.4 percent to end at 2,844.72 and the S&P 500 soared 29.63 points or 2.3 percent to 1,315.13.
by RTT Staff Writer
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