Hong Kong stocks climb to seven year high

Global Business

People watch an electronic stock indicator of a securities firm in Tokyo, Thursday, April 9, 2015. Asian shares were mixed Thursday, with gains supported by lower oil prices, firmness in U.S. markets and strong buying in Hong Kong by mainland Chinese investors. (AP Photo/Shizuo Kambayashi)

Hong Kong stocks powered ahead again on Thursday, extending the previous day’s surge by ending up 3.67 percent, or 962.37 points to 27199.23 points midday.

The buying frenzy started after Hong Kong returned from a holiday on Wednesday, when the city’s benchmark index rose to its highest level since 2008 and trading volume reached an all-time high, Marketwatch reported.

At one point in the morning session, the Hang Seng Index advanced 6.4 percent, almost reaching 28,000 points.

Analysts said the momentum was fueled by hopes of fresh money inflows from the Chinese mainland investors seeking arbitrage opportunities.

Shares in Hong Kong soared 3.80 percent on Wednesday as mainland investors capitalized on the Shanghai-Hong Kong Stock Connect program for the first time, while the turnover also hit a record high of 250.03 billion HK dollars (about $32.14 billion).

Stocks elsewhere in China also hit seven-year highs. The Shanghai Composite Index rose 0.84 percent to finish at 3,994.81 points, while the Shenzhen Component Index gained 0.53 percent to close at 13,841.72 points.

Boosted by ample liquidity and confidence in the economy, the Shanghai Composite Index climbed above 4,000 points, a key benchmark, for the first time since early 2008. The Shanghai Stock Exchange’s seven-year high was reached in spite of an upcoming wave of new share offerings which will reduce liquidity.

Analysts attributed the booming market to liquidity. Combined daily turnovers on the Shanghai and Shenzhen bourses has remained above one trillion yuan for the past two weeks.

Story compiled with information from Xinhua News and Marketwatch.