HSI rises as extradition bill row cools down - RTHK
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HSI rises as extradition bill row cools down

2019-06-17 HKT 18:31
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  • Hong Kong investors were back in business in the the absence of violent clashes after government postponed its extradition plans. Photo: AP
    Hong Kong investors were back in business in the the absence of violent clashes after government postponed its extradition plans. Photo: AP
Hong Kong stocks rallied on Monday, leading many Asian markets higher after last week's losses, with investors cheering a decision by the city to suspend plans to push through a controversial extradition law.

The Hang Seng Index rose 0.5 percent, to 27,240.

On the mainland, the Shanghai Composite Index closed up 0.2 percent, at 2,887, while the Shenzhen Composite Index lost 0.2 percent, to 1,502.

Investors returned to buying in Hong Kong after three days of losses that saw the Hang Seng drop more than 2 percent after protests against the extradition law changes.

The plan had also spooked business leaders who feared it would damage the city's reputation as an international business hub.

Traders "will breathe a loud sigh of relief today, as on Wednesday when tear gas and rubber bullets were filling the air, the markets were getting extremely jittery that this ticking time bomb was about to explode", said Stephen Innes, managing partner at Vanguard Markets.

"Fortunately, cooler heads prevailed."

Elsewhere, Jakarta, Seoul and Taipei all ended the day in the red.

Traders are now awaiting the conclusion of the Fed's policy meeting on Wednesday, with hopes it will provide some forward guidance on rates, even if it is not expected to announce a cut just yet.

Most observers are tipping a reduction next month as the US economy shows signs of stuttering.

"A lot is riding on this week's [meeting] as the anticipation of Fed easing has single-handedly buttressed global equity markets even as trade war escalation looms ominously," Innes added.

But there was a warning that if the central bank comes up short in its post-meeting statement, it would spark a sell-off.

"A less than full dovish undertone from the Fed could stop a rally in equities and reverse some gains as there is heavy anticipation of a rate cut sooner rather than later," said Oanda senior market analyst Alfonso Esparza. (AFP)