Feb 22 (Reuters) - Hong Kong stocks ended near 18-1/2-month highs on Wednesday, led by resource and property stocks, as sentiment was lifted by the city’s firmer economic growth outlook and stronger China inflows.
The benchmark Hang Seng index ended 1.0 percent up at 24,201.96, the highest since Aug. 11 2015, while the Hong Kong China Enterprises Index gained 1.2 percent, to 10,537.58.
Market confidence was lifted on news that Hong Kong handed out billions in tax cuts and poverty relief on Wednesday, to stimulate its economy that is expected to grow more strongly than expected at 2 to 3 percent this year.
Southbound inflows through the Shanghai-Hong Kong Stock Connect reached 43 percent of the daily quota on Wednesday, more than quadrupling Tuesday’s total usage of 9.8 percent and the highest since Dec 30.
Sectors gained ground across the board in Hong Kong.
Investors were unfazed by official data showing that China’s home price growth slowed for the fourth straight month in January as demand cooled further in the biggest cities.
A gauge of mainland property developers listed in Hong Kong rallied 3.2 percent, hitting a nearly five-month high.
Linus Yip, strategist at First Shanghai Securities Ltd, said optimism toward real estate plays was boosted as progress in containing home prices might make regulators refrain from taking more tightening moves in the property market.
He said the resources sector was bullish as investors awaited China’s annual parliament next month for clues about supply-side reforms, which could further lift prices of raw materials.
The resource sector added 3.5 percent at the close to the highest since June 2015.
“But the market would be under profit-taking pressure, if rising share prices were not justified, as earnings season has kicked off,” Yip said.
Reporting by Jackie Cai and John Ruwitch; Editing by Jacqueline Wong