Hong Kong shares hit 6 month high

Hong Kong stocks jumped 1.54 per cent by the close yesterday, hitting a six-month high after gains on Wall Street led by reports Greece was nearing a deal to avoid defaulting on its massive debt. The benchmark Hang Seng Index added 319.27 points to 21,018.46 on turnover of HK$76.1 billion (Dh35.9 billion), its highest finish since early August. Mainland Chinese developers led the rally after the country's central bank announced on Tuesday that banks must provide loans to first-home buyers. China Overseas Land rose 5.3 per cent to HK$15.24 and China Resources Land finished 3.1 per cent higher at HK$13.96, while Evergrande advanced 8.5 per cent to HK$4.08. "While this does not, strictly speaking, represent policy easing, this high-profile pledge by the [People's Bank of China] not only shows that the central government is now relaxed about the property market, but that they are also eager to see liquidity returning to the property market," brokerage UOB KayHian said in a note. Oil and gas players also rose with Sinopec up 1.8 per cent to HK$9.45 and Petrochina 2.2 per cent higher at HK$11.86, after China said it would raise petrol and diesel prices. Markets were also buoy-ed by news that a Greek debt restructuring deal had been drafted and may be signed, as a general strike gripped the nation, with demonstrators protesting against unpopular wage and pension cuts. Chinese shares closed 2.43 per cent higher as investors snapped up resources stocks and financial firms, dealers said. The Shanghai Composite Index, which covers A and B shares, gained 55.63 points at 2,347.53 on turnover of 80.9 billion yuan ($12.8 billion). Note of caution Index heavyweights rose sharply during the afternoon session, but analysts sounded a note of caution over the sustainability of the rally, given the lack of monetary loosening by the government. "The market remains rangebound, with concerns about liquidity balanced by already low valuations," Deng Wenyuan, an analyst at Soochow Securities, told Dow Jones Newswires. Copper producers gained, tracking robust prices for the commodity. Jiangxi Copper rose its daily ten per cent limit to 27.28 yuan and Yunnan Copper gained 7.5 per cent to 18.70 yuan. Banks and property developers were also among yesterday's biggest gainers. Industrial and Commercial Bank of China rose 1.9 per cent to 4.41 yuan. Developer China Vanke ended up 2.9 per cent at 7.59 yuan.