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Nikkei Markets

Hong Kong shares extend gains amid US stimulus hopes

Pork producer WH Group rises after reporting higher profit

HONG KONG (Nikkei Markets) -- Hong Kong shares headed for a second day higher on Wednesday following a surge on Wall Street overnight amid indications that U.S. lawmakers were nearing a deal for a stimulus package to boost the world's largest economy.

The Hang Seng Index added 2.1% to 23,143.24 by noon after rising 4.5% on Tuesday. Heavyweights AIA Group and Tencent Holdings rose 5% and 2.7%, respectively, contributing most to the gauge's gains by points.

Pork producer WH Group jumped 8% after the company reported a 31.7% surge in 2019 net profit and a 6.6% increase in revenue.

The Dow Jones Industrial Average soared 11.4% overnight, with the S&P 500 Index and the Nasdaq Composite also jumped, after U.S. lawmakers said they were close to a deal for a $2 trillion stimulus package that will likely be aimed at helping out of work Americans and industries that are stressed from the impact of the coronavirus.

The fiscal stimulus package will follow a series of steps by the U.S. Federal Reserve over the last few weeks to ease monetary policy, including the central bank's most recent announcement of a willingness to buy unlimited bonds and more credit facilities to support new bond and loan issuances.

"Sentiment has improved short term," said Castor Pang, head of research at Core Pacific Yamaichi International (H.K.). "The Fed announcing unlimited quantitative easing is the major key to the rebound."

The stimulus package will boost U.S. consumer confidence, but if the U.S. and Europe cannot control the spread of the virus, markets are likely to pull back, he added.

Meanwhile, total confirmed cases of the virus globally neared 400,000 and fatalities crossed 18,000 as of Tuesday. There have been more than 44,000 cases of the infection in the U.S. and about 540 deaths.

Governments across the world continue to encourage people to stay home and avoid large gatherings, with India announcing a 21-day lockdown to stem the spread of the virus in the world's second most populous nation. Singapore, meanwhile, has said it will close bars, cinemas and theaters and limit gatherings outside of work and school to 10 people or fewer from Friday.

In the mainland, the Shanghai Composite Index added 1.6%, while the yuan traded onshore slipped 0.1% against the dollar to 7.0672.

Truly International Holdings jumped 16.7% after the electronic consumer products maker said it expects its net profit for the year ended Dec. 31 to have increased by around six-times to over HK$500 million ($64.5 million) from last year.

Online game developer Netdragon Websoft Holdings climbed 2% after saying it expects net profit for 2019 to have increased over 45% from a year ago.

Property developer Sino-Ocean Group Holding slid 8.1% after reporting a 25.5% drop in 2019 profit.

Haitong International added 2% after reporting a 52% surge in 2019 profit and a 30% increase in revenue.

SRE Group fell 5.9% after the company said it expects to report a loss of 1.9 billion yuan ($268.7 million) to 2.4 billion yuan for 2019, compared with a profit of 113.5 million a year ago.

--Suzannah Benjamin

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