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Hong Kong: Shares end bruising third quarter with a solid gain
[HONG KONG] Hong Kong stocks bounced sharply on Wednesday from the previous session's two-year lows, wrapping up a tumultuous quarter in which the benchmark Hang Seng Index plunged more than 20 per cent.
At market close, the Hang Seng was up 1.4 per cent, to 20,846.30, while the China Enterprises Index gained 1.9 per cent, to 9,405.50 points.
But for the quarter, the Hang Seng was 20.6 per cent weaker, plagued by China's market rout, worries about global growth and uncertainty surrounding United States monetary policy.
Many investors remain pessimistic, viewing Wednesday's gain as a short-lived technical rebound that would do little to reverse the market's bearish trend. "The biggest risk ... remains the anaemic recovery in the global economy given the backdrop of feeble demand," said Qiu Zhi, Shenzhen-based analyst at Huatai Securities.
He predicted that over the next two months, the Hang Seng could fall to as low as 18,000 points, or nearly 14 per cent below its current level.
Market sentiment on Wednesday was aided by a surge in Chinese auto shares, after Beijing announced it would halve sales tax on small-engine cars to support the struggling sector.
Hong Kong-listed automakers including Great Wall Motor , Geely Auto and Dongfeng Group all surged over 10 per cent.
Sentiment also improved as energy shares, which tumbled the previous session, staged a sharp rebound. An index tracking the sector jumped 4.5 per cent.