Stocks rise on US Fed plan

Updated: 2010-11-05 08:20

(HK Edition)

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Hong Kong stocks rose after the Federal Reserve expanded measures to boost the US economy.

The Hang Seng Index (HSI) climbed 1.6 percent to 24,535.63 at the close of trading, extending its gain this week to 6.2 percent. The Hang Seng China Enterprises Index advanced 0.9 percent to 13,948.49.

"People perceive that the US Fed's decision will support valuations of risk assets," said Tim Leung, who helps manage about $1.5 billion at IG Investment Ltd in the city. "The Fed's purchasing will allow liquidity to stay in the market, and higher liquidity will have the effect of supporting risk assets."

HSBC which also receives 20 percent of its revenue from North America, climbed 3.6 percent to HK$85.50 and was the biggest contributor to the HSI's advance. Foxconn International Holdings Ltd rose 1.4 percent to HK$5.94.

The US Federal Reserve will buy an additional $600 billion of Treasuries through June, setting a pace of about $75 billion of purchases a month and "will adjust the program as needed," the Fed's Open Market Committee said in a statement in Washington. The US central bank also left unchanged its pledge to keep interest rates low for an "extended period."

Techtronic Industries jumped 7.3 percent to HK$8.70. The company had its share-price target raised to HK$11.50 from HK$8.80 by Citigroup Inc, which has a "buy" rating on the stock.

Property stocks posted the biggest gain among the HSI's four industry groups, with Sino Land jumping 6.1 percent to HK$18.10. The developer is among the top picks of Goldman Sachs, which forecast "another round of strong property sales to boost developers' performance," according to a research report Thursday.

New World Development Co jumped 4.7 percent to HK$16.98. Henderson Land Development Company Ltd rose 2.2 percent to HK$58.80.

Futures on the HSI increased 1.9 percent to 24,533. Six stocks rose for each that fell of the measure's 45 constituents.


Stocks rise on US Fed plan

Stocks rise on US Fed plan

Stocks rise on US Fed plan

(HK Edition 11/05/2010 page3)