Hong Kong stocks surge more than 2pc
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HONG KONG, June 29 AFP
June 29 2012, 8:18PM
Hong Kong stocks closed 2.19 per cent higher on Friday after eurozone leaders at a crucial European Union summit struck a surprise deal to help the crisis-hit single currency.
The benchmark Hang Seng Index added 416.19 points to finish at 19,441.46 on turnover of $HK50.79 billion ($A6.58 billion), up from $HK41.95 billion on Thursday. The index rose by 2.3 per cent this week.
After a sluggish start, stocks surged as European leaders unexpectedly set out concrete measures to boost the euro. Their initiative came at a two-day meeting in Brussels, which ends on Friday.
The accord paves the way for the eurozone's 500 billion euro ($A623.32 billion) bailout fund to recapitalise ailing banks directly, without passing through national budgets, as well as for help to crisis-hit Italy and Spain.
The EU's leaders also agreed to a package of measures worth some 120 billion euros they hope will bolster growth in the recession-hit bloc.
Local developer Sino Land rose by three per cent to $HK11.62, snack-food maker Want Want China was up by 4.6 per cent to $HK9.50, while China's largest coalminer, Shenhua Energy, ended up by 3.2 per cent at $HK27.05.
Hong Kong Exchanges, which runs the city's sharemarket, was up by 2.9 per cent to $HK110.00, buoyed by news it is to set up a joint venture with the Shanghai and Shenzhen exchanges in a bid to boost economic integration.
Chinese shares closed up by 1.35 per cent. The benchmark Shanghai Composite Index, which covers both A and B shares, added 29.59 points to 2225.43 on turnover of 56 billion yuan ($A8.89 billion).
"The EU leaders are setting up a supervisory body for banks in the eurozone. That drove up the euro and sent the (US) dollar down, which then triggered gains in regional bourses," Tang Yonggang, a Hongyuan Securities analyst, told Dow Jones Newswires.
But Tang also warned that the current rebound might not last long as investors turn their focus back to the slowing Chinese economy.
Banks and metal stocks led the gains.
China Minsheng Banking Corp was up by two per cent to 5.99 yuan and Shanghai Pudong Development Bank climbed by 1.5 per cent to 8.13 yuan.
Inner Mongolia Baotou Steel Rare Earth (Group) gained four per cent to 39.46 yuan and Zhongjin Gold Corp rose by one per cent at 21.52 yuan.
Liquor producers also rose on higher earnings expectations.
Jiugui Liquor jumped by 6.2 per cent to 52.40 yuan after it said in an exchange filing late on Thursday that its first-half profit would more than triple. Sichuan Tuopai Shede Wine rose by 8.1 per cent to 36.25 yuan.
