Hong Kong’s stock market extended gains into a sixth day Thursday, but trading was volatile, as investors rushed to snap up cheap shares of mainland Chinese companies.
In Japan, the Nikkei 225 index hiked another 147.91 points, or 0.8%, to 19,937.72, to set a fresh 15-year high of 19937.72, at one point coming within 50 points of crossing the 20,000 mark for the first time since April 2000.
In Hong Kong, the Hang Seng index took flight another 707.53 points, or 2.7%, to 26,944.39, after Wednesday’s climb of nearly 1,000 points.
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.
The enthusiasm comes from a variety of factors. Flows into Hong Kong have accelerated since China allowed mutual funds to buy shares in the city using a new trading link. In addition, many investors consider stocks in Hong Kong cheap as they have lagged behind recent gains in Shanghai.
Global investors were buying on expectations that mainland investors with money parked offshore may be sending even more capital to Hong Kong using other channels.
Stocks in Hong Kong could go higher, Credit Suisse said, given that the Hang Seng Index is still a “fair value” at 11 times price-to-earnings.
Adding to investor confidence Thursday was an article in the state-run China Securities Journal headlined “Go! Buy Hong Kong Stocks!”, signaling to some analysts that the mainland government is encouraging the rally.
Korea’s KOSPI was unchanged after the Bank of Korea kept interest rates on hold at 1.75%, in line with market expectations.
CHINA
The Shanghai CSI 300 removed 33.67 points, or 0.8%, to 4,262.14
Mainland Chinese buyers exhausted a quota of 10.5 billion yuan ($1.7 billion U.S.) for net purchases through the new Shanghai-Hong Kong Stock Connect program on Wednesday and are on track to repeat that feat today.
In other markets
In Singapore, the Straits Times Index deleted 0.38 points to 3,460.30
The Kospi index in Korea lost 0.39 points to 2,058.87
In Taiwan, the Taiex index shed 3.93 points to 9,568.04
In New Zealand, the NZX 50 fell 12.55 points, or 0.2%, to 5,847.17
In Australia, the S&P/ASX 200 faded 28.51 points, or 0.5%, to 5,932.22
