HSI Ends Strongly As US Relief Package Lifts Markets

Hong Kong stocks rose on Friday, closing a healthy week on a positive note as investors welcomed a blockbuster US stimulus plan and pledges by the Federal Reserve to ease liquidity concerns.

The Hang Seng Index added 0.6 percent, to close at 23,484.

Across the border, the Shanghai Composite Index advanced 0.3 percent, to 2,772 but the Shenzhen Composite Index slipped 0.5 percent, to 1,693.

Other Asian equities also mostly rose with Tokyo finishing 3.9 percent higher.

Seoul and Singapore added almost 2 percent, Bangkok gained 1.5 percent and Jakarta jumped almost 4 percent. 

But Mumbai fell 1.5 percent as investors brushed off a deep interest rate cut by the Indian central bank, while Sydney went into the weekend on the back of a 5.3 percent loss.

Wellington, Taipei and Manila were also down after reversing early gains.

Support for markets this week has come from a US$2 trillion stimulus bill that is making its way through Congress and is expected to be passed by the House of Representatives on Friday before being signed off by President Donald Trump.

"For investors, this package should be good for US equities and other risk assets as it should leave US corporations in a better position to weather the economic downturn and thrive in the rebound," said David Kelly, at JP Morgan Asset Management.

AxiCorp analyst Stephen Innes said: "The Fed's bazookas appear to be filtering through, and that's a massive positive the market is running with."

However, he warned: "It's impossible to gauge the ultimate economic impact or the duration of the Covid-19 pandemic for weeks, possibly months, and until that point, the sustainability of any rally in stocks is questionable."

Adding to crude market weakness was a warning from the head of the International Energy Agency that consumption could drop by 20 million barrels a day.

Also, industry consultant IHS Markit warned that current output levels cannot be sustained throughout the second quarter because storage capacity will fill up.

"Production is going to have to be reduced or even shut in. It is now a matter of where and by how much," said Jim Burkhard, vice president and head of oil markets at IHS Markit. (AFP)