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Asia, News

HK stocks notch best week in 4 as investors embrace new security law

* HK->Shanghai Connect daily quota used 17.7%, Shanghai->HK daily quota used 7%

* HSI +1.0%, HSCE +1.9%, CSI300 +1.9%

* FTSE China A50 +2.0%

July 3 (Reuters) – Hong Kong stocks ended higher on Friday to post their best weekly gain in one month, as investors reckoned that Beijing’s new security law will benefit local markets and lead to more listings by Chinese companies.

** At the close of trade, the Hang Seng index was up 248.93 points or 0.99% at 25,373.12. The Hang Seng China Enterprises index rose 1.85% to 10,243.29.

** For the week, HSI gained 3.4%, while HSCE climbed 4%, both posting their biggest weekly advance since the week of June 5.

** New Hong Kong security laws came into effect on Wednesday that will punish crimes of secession, subversion, terrorism and collusion with foreign forces with up to life in prison, heralding a more authoritarian era for China’s freest city.

** However, Hong Kong shares gained as investors see the law leading to more mainland money, and more financial links with the world’s second-biggest economy, traders and analysts said, despite legislation some fear will erode the city’s freedoms.

** Washington’s moves to revoke Hong Kong’s special treatment under U.S. law will have limited impact, most analysts say, while closer economic ties with China will benefit the city.

** Adding fuel to the rally was a latest survey showing expansion in China’s services sector.

** China’s services sector expanded at its fastest pace in over a decade in June as the easing of coronavirus-related lockdown measures revised consumer demand, a private survey showed on Friday, though companies continued to shed jobs.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.04%, while Japan’s Nikkei index closed up 0.72%.

** The yuan was quoted at 7.0665 per U.S. dollar at 0820 GMT, 0.01% weaker than the previous close of 7.066.

** At close, China’s A-shares were trading at a premium of 32.56% over Hong Kong-listed H-shares. (Reporting by the Shanghai Newsroom, Editing by Sherry Jacob-Phillips)

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