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Hong Kong stocks jump most in a month

By Bloomberg | China Daily | Updated: 2016-07-01 07:51

Hong Kong stocks jumped the most in a month on Thursday, erasing a quarterly loss, as they extended a recovery from the selloff that immediately took place after the United Kingdom's vote last week to leave the European Union.

The Hang Seng Index added 1.8 percent, taking its gain since March 31 to 0.1 percent. CK Hutchison Holdings Ltd and HSBC Holdings Plc, among companies most closely tied to Europe, added to Wednesday's rebound as anxiety over Brexit abated.

Kweichow Moutai Co rose to a record as it paced an advance by mainland consumer shares, while the Shanghai Composite Index slipped 0.1 percent, capping a second quarterly drop.

Speculation that global policymakers will act to contain the fallout from last week's British referendum has spurred a rebound in global equities after the shock result wiped off nearly $4 trillion from stock markets around the world.

Bank of England Governor Mark Carney on Thursday spoke to members of the press and the finance industry in a message of reassurance. The recovery in Hong Kong stocks over the past two days has been paced by exporters and companies with strong business ties to Europe.

"The one-off impact of Brexit is over," said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai.

"Even if the event causes extreme volatility in financial markets, central banks around the world will provide liquidity to limit the impact."

The Hang Seng Index climbed to 20,794.37 at the close. The Hang Seng China Enterprises Index jumped 1.7 percent, narrowing its first back-to-back quarterly loss in three years to 3.2 percent. Hong Kong's markets will be closed on Friday for a public holiday. The Shanghai Composite fell to 2,929.61 at the close, halting a three-day rally.

China's bid for greater influence in global financial markets will benefit from the UK's decision to leave the EU, Mark Mobius, executive chairman of Templeton Emerging Markets Group, said in an interview in London on Wednesday.

Asia will be seen as relatively more desirable because it is largely isolated from Europe's turmoil, he said.

HSBC Holdings Ltd, the London-based lender with the second-highest weighting in the Hang Seng Index, gained 0.9 percent, trimming its loss since the Brexit vote to 6.8 percent. Standard Chartered Plc rose 0.7 percent and CK Hutchison advanced 2.1 percent, also paring their respective declines after the UK referendum as both rose for a second day.

China Shenhua Energy Co, the nation's largest coal producer, was the Hang Seng Index's best performer during the second quarter with a 17 percent advance. Real estate companies Wharf Holdings Ltd and Link REIT rallied at least 11 percent, while Lenovo Group Ltd was the quarter's worst performer as it sank 23 percent.

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