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Nevin Nie

The Hong Kong stock market yesterday  recovered almost all the losses from its biggest fall in seven years  on Monday, buoyed by recoveries in the United States and mainland share markets along with support from a strong Hong Kong dollar.
The Hang Seng Index opened 353.33 points higher, bouncing back 1.25 per cent from  Monday's close of 28,373.63,   before climbing as much as 3.68 per cent to an intraday high of 29,418.99 in the afternoon  after mainland stock markets  recouped losses later in the day.
The blue-chip index closed 3.54 per cent or 1,003.23 points higher at 29,376.86,  a day after ending 1,091.42 points lower.
The H-share index rose 827.48 points or 4.4 per cent to 19,636.46.
The Shanghai Composite Index closed with a gain of 106.055 points or 1.87 per cent at 5,773.387.
Share markets in Japan, South Korea, Indonesia and the Philippines also were up, with gains ranging from 0.07 per cent to 4.1 per cent. Wall Street stocks were trading 0.13 per cent higher at midday yesterday.
'I am not surprised to see the Hang Seng Index taking back Monday's losses in just one day,' said Patrick Yiu Ho-yin, an associate director at CASH Asset Management. 'We used to see the Hong Kong dollar turning weaker after a severe loss similar to that of Monday.
'In contrast, the Hong Kong dollar remained strong this time, giving evidence that the money is still in Hong Kong after the profit taking, instead of leaving for other markets.'
The Hong Kong dollar rose on Monday to a 28-month high of HK$7.7502 per US dollar. The currency eased to HK$7.7517 at one point yesterday after the city's de facto central bank sold HK$775 million for US dollars in the afternoon, but it rose to HK$7.7503 late in the session.
The currency strengthened due to more money coming into the city to buy Hong Kong stocks and on talks that the peg would be abolished.
'The recovery in the mainland stock markets also helped drive up the Hong Kong market in the afternoon session,' Mr Yiu said. 'Chinese companies listed in Hong Kong are very sensitive to the performance of the A-share market. China banking shares in Hong Kong  rose a lot after their A shares gained.'
Before the  fall on Monday, JPMorgan said in a report a correction was expected  because trading volumes in both equities and warrants  had risen to very high levels in recent weeks.
Turnover on the  main board yesterday dropped to HK$135.7 billion from HK$162.62 billion on Monday.



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