HK stocks rebound sharply after Fed rate cut

HONG KONG -- Hong Kong stocks made a strong comeback on Wednesday by rebounding 10.72 percent after the Federal Reserve suddenly slashed its interest rate by 75 basis points to 3.5 percent overnight, a move that helps ease market nerves.

The Fed's surprise rate cut injected great momentum into stocks in Hong Kong, where investors' confidence was greatly battered by waves of panic sell-off during the past two days.

The dramatic comeback of the benchmark Hang Seng Index, its largest single-day upsurge in about 10 years, also regained the huge losses on Tuesday, when the index dived 2,061 points to the lowest level since August last year.

The blue-chip Hang Seng Index opened 1,601.57 points, or 7.36 percent, higher at 23,359.2 and extended its rally in the afternoon session by as much as 2,482.35 points, or 11.4 percent, before surging 2,332.54 points, or 10.72 percent, to close at 24, 090.17.

Turnover rose slightly to 156.35 billion HK dollars (20.04 billion U.S. dollars from Tuesday's 155.76 billion HK dollars (19.97 billion U.S. dollars).

In the wake of the Fed rate cut, the Hong Kong Monetary Authority, the de facto central bank of the city, also announced to lower its Base Rate by 75 basis points to 5 percent with immediate effect on Wednesday, pumping dynamics into the real estate companies that were under huge sell-off pressure during thepast days.

All the 43 components of the benchmark Hang Seng Index rose.

Market heavyweight HSBC, Hong Kong's largest bank, rocketed 11.3 percent to 116.2 HK dollars, sending up the index by 372.66 points alone.

China Mobile, the market's largest stock measured by capitalization and the country's largest mobile phone operator, soared 10.47 percent to 120.3 HK dollars, lifting the index by 302. 93 points alone.

Oil sectors were among the major driving forces for the market upsurge. PetroChina, the country's largest oil producer, came back with a 17.46 percent progress to 11.3 HK dollars, supporting the index by 156.75 points. CNOOC, China's largest offshore oil company, jumped 16.06 percent to 11.2 HK dollars, elevating the index by 106.28 points. Sinopec, Asia's largest oil refiner, shot up 17.65 percent to 9 HK dollars, boosting the index by 100.18.

Hong Kong Exchanges and Clearing Ltd., the market's sole operator, rebounded 8.19 percent to 169.1 HK dollars.

Hong Kong's property companies rebounded sharply due to the interest rate cut. Cheung Kong, one of Hong Kong's largest house developers controlled by tycoon Li Ka-shing, surged 10.36 percent to 130 HK dollars. SHK Properties soared 9.32 percent to 154.9 HK dollars. Henderson Land moved up 7.52 percent to 69.35 HK dollars.New World Development jumped 10.27 percent to 24.15 HK dollars. Sino Land went up 9.25 percent to 25.4 HK dollars. Hang Lung increased 9.87 percent to 29.5 HK dollars.

China Enterprise Index or H-shares, which tracks 43 Hong Kong- listed shares in the Chinese mainland, recovered 1,367.62 points, or 11.48 percent, to 13,279.53.

China's banking and insurance companies listed in Hong Kong were much higher. China Life, the largest life insurer in the country, went up 15.76 percent to 31.95 HK dollars. ICBC, China's largest lender, gained 11.06 percent to 4.92 HK dollars. Bank of China, the second largest bank in the country, rose 8.12 percent to 3.33 HK dollars. CCB, the country's third largest bank, advanced 16.06 percent to 5.78 HK dollars. Bank of Communications rocketed 12.8 percent to 8.9 HK dollars. China Merchants Bank rebounded 10.33 percent to 28.3 HK dollars. Ping An, the second largest insurer in China, moved up 9.57 percent to 65.25 HK dollars.

Among the 43 H-share components, Jiangxi Copper dived 19.02 percent to 16.6 HK dollars as it resumed trading from a week-long suspension during the market routs amid reports that the company plans to go public in A-shares in Shanghai Stock Exchange. (7.8 HKdollars = 1 U.S. dollars)