HONG KONG (NewsRise) -- Hong Kong stocks posted its first back-to-back weekly gain since September as a drop in U.S. bond yields lifted property developers and a rebound in the offshore yuan soothed concerns over capital outflows.
The Hang Seng Index rose 0.2% to 22,503.01 on Friday, lifting its weekly advance to 2.3%. As many as 45 of its 50 constituents climbed during the week, which was shortened by a holiday on Monday. Most of the gains came after the Federal Reserve's December minutes showed the majority of its policy makers thought that a gradual pace of rate hikes was appropriate amid uncertainty over Donald Trump's fiscal policies. The outlook for next week may be shaped by U.S. nonfarm payrolls data for December, due later on Friday.
"The Fed's preference for gradual rate hikes and the fall in U.S. yields will help ease pressure on the yuan," said Castor Pang, head of research at Core Pacific-Yamaichi International in Hong Kong.
Wharf Holdings jumped 9.1% during the week and Sun Hung Kai Properties rose 5.5% to rally real estate companies that had been hammered down by the prospect of higher interest rates and inflation in the U.S. The offshore yuan, meanwhile, is set for a record weekly gain even as it fell 1% to 6.8533 on Friday. After edging past 6.97 as recently as Monday, it had rebounded strongly over the previous two days as authorities curbed yuan liquidity in the city, boosting the short-term cost of borrowing the currency.
The Hang Seng China Enterprises Index inched up 0.1% on Friday, capping a weekly gain of 2.3%. The Shanghai Composite declined 0.4% during the session, but still ended the week 1.6% higher, after the release of upbeat manufacturing and services sector data.
The Nikkei Asia 300 Index added 0.8% to 1,060.23 on Friday.
Energy stocks were amongst the top gainers this week amid expectations that crude prices will be supported after an agreement between major global oil producing nations to cut output took effect. Sinopec climbed 1.9% to HK$5.82 during the session to cap its best week since July. PetroChina added 1.2% to HK$6.04 on Friday, its highest level since November 2015.
China Construction Bank (CCB) slipped 0.3% to 5.83 on Friday, halting a two-week rising streak. The lender has signed debt-for-equity swap agreements totaling 50 billion yuan ($7.3 billion) with three state-owned companies in Shaanxi province, according to a Reuters report citing the Xinhua News Agency.
ZTE rose 1.3% to HK$12.78. The telecom equipment major has made its first "crowdsourced" smartphone ready for preorders in the U.S., the South China Morning Post reported. The phone has some features suggested by the public.
China Mengniu Dairy was the week's worst performer on the Hang Seng Index as it fell 2.7%. The company this week said it will increase its stake and make a general offer for China Modern Dairy Holdings. That offer is credit negative, Moody's Investors Service said on Friday.
-- V. Phani Kumar and Nimesh Vora