Hong Kong: Shares up on strong China market, fading US rate hike fears

[HONG KONG] Hong Kong stocks extended recent gains on Monday, with investor sentiment underpinned by renewed strength in China's markets and hopes that the US central bank will not raise interest rates any time soon.

The Hang Seng index rose 1.2 per cent to 22,730.93 points, while the China Enterprises Index gained 1.3 per cent to 10,538.19 points.

Chinese shares listed in Hong Kong were boosted by gains of over 3 per cent in mainland stocks after China's central bank took fresh steps to inject liquidity into the struggling economy and said the stock market's correction"is almost over".

The Hong Kong market last week posted its best performance in six months.

The robust rebound has been supported by expectations that world central banks, including the US Federal Reserve, would keep borrowing costs low to aid a slowing global economy.

Risk appetite also has improved on a strong recovery in commodity prices.

China's Finance Minister Lou Jiwei was quoted by the China Business News on Monday as saying that now is not the right time for the United States to raise interest rates, given the global economic situation.

All main sectors in Hong Kong, with the exception of the service sector, rose on Monday, with energy stocks leading the charge.

China telecom giants China Mobile, China Telecom and China Unicom were up strongly on hopes that a stake sale involving China Tower Corp, which was set up to own the wireless infrastructure of the nation's major carriers, would be announced soon.

Improving investor sentiment bodes well for a slew of Chinese companies slated to launch Hong Kong initial public offerings in the coming weeks, including China Reinsurance, Huarong Asset Management and China International Capital Corp (CICC).

REUTERS