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Nikkei Markets

Hong Kong shares rebound on global cues while virus spreads

Geely jumps after saying it has started talks to combine businesses with Volvo

  © Reuters

HONG KONG (Nikkei Markets) -- Hong Kong shares rose for the first time in three days on Tuesday, aided by positive global cues and confidence that there was ample liquidity in the financial system, although worries over the spread of the coronavirus lingered.

The Hang Seng Index climbed 1.3% to 27,583.88. Geely Automobile Holdings jumped 5.7% after the carmaker said it is in preliminary talks with Sweden-based automaker Volvo Car AB to combine businesses that could realize synergies in cost structure and development of new technologies. Among heavyweights, Tencent Holdings added 2.1%, while China Construction Bank advanced 2.4%.

All three major U.S. equity indexes advanced overnight, with the S&P 500 and the Nasdaq Composite closing at record highs. Markets in the rest of the region traded mostly higher on Tuesday, while futures pointed to a stronger opening on Wall Street. The gains came even as China said the death toll from the coronavirus topped 1,000 as of Monday and the number of confirmed cases of the infection topped 42,000.

"Worries over economic growth are still with us, but short-term liquidity is really abundant," said Alan Li, portfolio manager at Atta Capital. "Of course, some of it will flow into Hong Kong through the stock connect program."

The People's Bank of China reportedly injected 100 billion yuan ($14.3 billion) in liquidity into the financial system via reverse repurchase agreements on Tuesday.

Turnover on the stock exchange topped 111 billion Hong Kong dollars ($14.3 billion).

In the mainland, the Shanghai Composite Index climbed 0.4%, while the yuan traded onshore added 0.1% against the dollar to 6.9765.

Cosmetics retailer Sa Sa International Holdings slid 2% after saying it plans to temporarily close 20 of its stores in Hong Kong and Macao in response to the virus outbreak in the region.

Electric carmaker BYD lost 3.5% following a 42.7% decline in total sales volume for January.

NagaCorp jumped 10% after the Cambodia-based casino operator reported a 33% surge in 2019 net profit and said revenue rose 20% from a year ago.

Yestar Healthcare Holdings surged 10.6% after saying it has developed disinfection consumables products that support the combat of the coronavirus outbreak.

Poly Property Group rose 1.6% after reporting a 30% increase in January contracted sales.

China Longyuan Power Group fell 0.9% after reporting a 6.7% decrease in January power generation.

-- Benny Kung

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