Business / Markets

Hong Kong's stocks extend gains to fifth day

(Agencies) Updated: 2016-06-24 10:24

Hong Kong stocks capped a fifth day of gains, led by banks, as Britons began voting on Thursday to decide whether to stay in the European Union. Mainland equities were dragged down by losses for material producers.

The Hang Seng Index rose 0.4 percent at the close. HSBC Holdings Plc, which is listed in London and Hong Kong, posted the longest stretch of gains since August. CNOOC Ltd paced declines for energy shares. The Shanghai Composite Index slid 0.5 percent for its steepest loss in a week. Shandong Iron and Steel Co dropped after the Financial Times reported the US will raise duties on some steel products to over 500 percent.

The Hang Seng gained 73 points to 20,868.34, paring this year's decline to 4.8 percent. The five-day advance is the longest winning streak since May. The Hang Seng China Enterprises Index rose 0.3 percent, climbing for a fifth day. The Shanghai Composite extended its 2016 loss to 18 percent, the steepest among 93 global benchmark indexes tracked by Bloomberg.

In Hong Kong, HSBC rose for a fifth day, adding 1 percent. Bank of East Asia Ltd climbed 1.2 percent. Industrial & Commercial Bank of China Ltd advanced 1.6 percent. CNOOC halted a three-day, 7.8 percent rally, sliding 0.6 percent.

Hong Kong stocks may suffer in case of Brexit-led turbulence in global markets given the Hang Seng's high correlation with developed world stock indexes, Credit Suisse Group AG analysts wrote in a note.

Polling has suggested the vote is finely balanced between the two camps. Hong Kong should brace itself for heavy fallout should the UK exit the EU, the South China Morning Post reported on Thursday, citing Chief Executive Leung Chun-ying.

"Investors think it's not worth it to make major bets now because the result of the referendum is highly uncertain," said Shen Zhengyang, a strategist at Northeast Securities Co in Shanghai. "The A-share market will be less influenced by the results of the UK vote as it's relatively closed."

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