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Nikkei Markets

Hong Kong shares jump as heavyweights rise after US rally

Forty-nine Hang Seng Index constituents end higher

HONG KONG (Nikkei Markets) -- Hong Kong shares logged their biggest single-day gain in a month on Thursday, tracking an overnight advance on Wall Street, even as concerns over the widespread economic impact of the coronavirus lingered.

The Hang Seng Index rose 2.1% to 26,767.87, its biggest daily gain since Feb. 6. Heavyweights AIA Group and Tencent Holdings added 3.5% and 3.1%, respectively, contributing more than a third of the gauge's gains by points. Techtronic Industries advanced 3.2% after the power tools and appliances maker reported an 11.3% increase in 2019 net profit.

Indexes on Wall Street rebounded on Wednesday, with the Dow Jones Industrial Average climbing 4.5%, after the U.S. House of Representatives approved an $8.3 billion funding bill to help combat the spread of the coronavirus. The move came a day after the U.S. Federal Reserve unexpectedly delivered a 50-basis-point rate cut to help cushion the economy from the outbreak. Total confirmed cases of the coronavirus across the globe had surpassed 95,000 by Wednesday, with deaths crossing 3,200.

Will Leung, head of investment strategy for Hong Kong at Standard Chartered Bank (Hong Kong), said equity gains in the city were lagging behind the U.S. rally because people are still waiting for more policy responses from Hong Kong and China.

"We think people are waiting for a catalyst," he said. Still, high turnover is a sign of optimism, "reflecting that investor interest is still there."

Turnover on the Hong Kong Stock Exchange's main board was at 132.62 billion Hong Kong dollars ($17.07 billion) on Thursday.

In the mainland, the Shanghai Composite Index rose 2%, while the yuan traded onshore slipped 0.3% against the dollar to 6.9426.

Chow Tai Fook Jewellery Group climbed 6.3% even as the jewelry chain operator reported a 60% drop in retail sales value for January and February in Hong Kong and Macao. It said overall sales for the period decreased 42% in China.

Jefferies said it expects the company to see a recovery in China during the April to June quarter, while Hong Kong remains uncertain amid lingering social issues. The house maintained its "buy" rating on the stock, saying the share price reflected the weak sales trend. Nomura and Daiwa Capital Markets also kept their "buy" ratings on the stock.

Central China Real Estate jumped 7.2% after the property developer said it expects net profit for the year ended Dec. 31 to have increased at least 70% from a year ago.

China Aircraft Leasing Group added 6% following a 10.8% increase in 2019 profit and a 5.4% climb in revenue.

Wuxi Biologics rose 1% after saying it expects profit for the year ended Dec. 31 to have increased by more than 58% from a year ago.

China Finance Investment advanced 6.8% after saying it expects net loss for 2019 to have narrowed "significantly" from a year ago.

Agile Group Holdings fell 0.9% after reporting a 58% plunge in February presale value.

-- Benny Kung

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