Drop in Oil, Shanghai Surges 3.6%

123jump.com Staff
18 Jul, 2008
New York City

A drop in oil prices lifted stocks in Shanghai and in Hong Kong. Airlines and realty stocks closed higher. Yuan continue to surge and for the week gained 0.25% to 6.82 to a dollar. For the year yuan has gained 7% and likely to gain at least 1% more in the rest of the year. China yesterday reported gross domestic product surged 10.1% in the second quarter ending in June.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong jobless was unchanged at 3.3% in the quarter to June.[/R]

Hong Kong market averages traded in the positive territory as financial stocks increased after JP Morgan Chase in the U.S. reported better than expected earnings.

Market Sentiment

In Hong Kong trading Hang Seng Index gained 0.64% or 139.47 at 21,874.29, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, rose 0.56% or 67.31 at 12,123.88. In Shanghai trading CSI 300 edged up 3.58% or 97.39 at 2,815.46.

Daily turnover on main-board was HK$59.6 billion compared with HK$63.5 billion yesterday.

HK Rate Increase 0.85%

Hong Kong Monetary Authority said yesterday the composite interest rate in the Hong Kong Special Administrative Region increased to 0.85% at the end of June from 0.75% at the end of May.

According to the Monetary Authorities, the composite interest rate will continue to be impacted by movement in U.S. interest rates and the global financial market.

HK Jobless Rate At 3.3%

The jobless rate in the Hong Kong Special Administrative Region was unchanged from the previous quarter ended May at 3.3% in the three months to June. The underemployment rate rose to 1.9% from 1.8% in the review period.

Matthew Cheung Secretary for Labour and Welfare of the HKSAR government noted that the labor market remains active and the company will remain cautious in the wake of the uncertainties on the global market.

Statistics also show that total employment fell 1,200 to 3,532,500, while the labor force fell 1,900 to 3,653,900 and the number of unemployed persons dropped 600 to 121,500.

However, the number of the underemployed rose 600 to 67,800.

During the month, the Labour Department private sector vacancies increased 24.3% from last year at 51,845 and first six months private sector vacancies jumped 32.4% on the year.

HK Grants License to Industrial Bank of Taiwan

Hong Kong Monetary Authority announced yesterday that it has granted a license to the Industrial Bank of Taiwan effective on July 16 and with that the number of licensed banks in the Hong Kong Special Administrative Region rose to 145.

Gainers & Losers

HSBC advanced 2.6% on better than expected earnings from JP Morgan Chase.

Offshore oil producer CNOOC fell 2.8% after oil prices eased by $15 in the past three days.

Property companies also increased. Sun Hung Kai Properties gained 1.7% and Hang Lung Properties increased 4.1%.

China Resources Enterprises fell 3.2% after Credit Suisse downgraded the stock to “neutral” from “outperform.”

Commodity stocks also fell on bearish expectations on some of the company’s earnings. China Shenhua Energy shed 1% and Yanzhou Coal plummeted 6%.

Sinopec Corp edged up 0.1% as oil prices retreated.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 84.25 or 0.65% to 12,803.70, Hang Seng index in Hong Kong increased 139.47 or 0.64% closed to 21,874.19. ASX 200 index in Australia decreased 60.60 or 1.24% to close 4,840.40. The KL Composite index in Malaysia decreased 16.13 or 1.44% closed to 1,105.04.

The Kospi Index in South Korea decreased 15.57 or 1.02% to close at 1,509.99, SET index in Thailand closed lower 5.45 or 0.81% to 664.52 and JSE Index in Indonesia decreased 26.58 or 1.23% to 2,141.14. The Sensex index in India increased 523.55 or 3.99% to 13,635.40.