Hong Kong Stocks Edge Up, Shanghai Continues Rally

Hong Kong stocks finished the morning slightly higher on Wednesday, extending the previous day's surge, with investors keeping track on US efforts to agree on a new economic stimulus package.

The Hang Seng Index edged up 0.1 percent, to 25,655.

On the mainland, the Shanghai Composite Index gained 1.2 percent, to 3,360, while the Shenzhen Composite Index rose 1.5 percent, to 2,266.

Taipei, Jakarta and Wellington were also up but Tokyo slipped by the break while Sydney fell more than 1 percent the day after chalking up a gain of more than 2 percent. Seoul edged up 0.3 percent.

But Morgan Stanley strategist Andrew Sheets said stocks would have trouble pushing on with their rally.

"I'm more concerned going into the August, September period: what's going to then be the next catalyst to take the broader market higher?" he told Bloomberg TV, adding it was going to be "a tougher period for stocks".

The euro extended gains against the US dollar following the EU agreement and was sitting at its highest levels since early 2019, while the Federal Reserve's ultra-low interest rates continue to help higher-yielding currencies including the Australian dollar, Indonesian rupiah and South Korean won.

Expectations that rates will remain low for some time, and ongoing uncertainty over the spread of Covid-19, have also led traders into gold, which is considered a hedge against turmoil.

The yellow metal was sitting at US$1,860 an ounce Wednesday and is approaching its record high above US$1,900.

The rally in gold, which is up almost a quarter this year, has helped drive silver to a seven-year high of US$22.84 per ounce. (AFP)

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