The Hang Seng Index is up 0.7%, gaining further momentum after its recent rally, as investors cheer the fresh measures from China being dubbed the “mini-stimulus” and shrugging off slightly weak readings on the service sector.
Over on the Chinese mainland, the Shanghai Composite is also rising, currently up 0.2%.
In the light of recent signs of a slowdown, China’s State Council on Wednesday launched a small stimulus package to “stablize growth”, including the reduction of tax burdens on small enterprises, more low-income housing, and speeding up railway construction in central and western China (see earlier post on today’s blog).
Shares of Chinese construction companies are shooting higher in Hong Kong, as China National Building Material Co. jumps 4.3%, cement producer BBMG Corporation climbs 4%, Anhui Conch Cement gains 2.9%, and Chan Shanshui Cement Group adds 2.4%.
Steel and metal stocks are also shining, as Maanshan Iron & Steel rallies 4%, Angang Steel Co. pushes 2.6% higher, Lingbao Gold advances 3.7%, and Aluminum Corp. of China rises 2.2%.
Meanwhile, Hong Kong Exchanges & Clearing (HKEx) is extending gains by 0.6% after a 5.4% rally in the previous session. Stocks of HKEx were halted from trading Wednesday afternoon after reports said the bourse has reached an agreement with the Shanghai Stock Exchange, which would allow foreign investors to directly buy mainland-China-listed stocks through the HKEx.
The exchange said later in a statement that they have been in discussions with their mainland counterparts regarding “mutual market-connectivity initiatives” but hasn’t reached any agreement at this point.
On the downside in Hong Kong, shares of Italian fashion house Prada are dropping 7.7% after posting 2013 earnings little changed from those the previous year.