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 would 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 percent at 25,373.12.
The Hang Seng China Enterprises index rose 1.85 percent to 10,243.29.
For the week, HSI gained 3.35 percent, while HSCE climbed 3.96 percent, both posting their biggest weekly advance since the week of June 5.
New Hong Kong security legislation came into effect on Wednesday. The laws punish crimes of secession, subversion, terrorism and collusion with foreign forces with sentences of up to life in prison, heralding a more authoritarian era for the territory.
However, Hong Kong shares gained as investors saw the legislation leading to more mainland money, and more financial links with the world’s second-biggest economy, traders and analysts said.
Washington’s moves to revoke Hong Kong’s special treatment under US law would have a limited effect, most analysts say.
Adding fuel to the rally was an upbeat survey showing expansion in China’s services sector.
Chinese stocks rose for a fourth straight session on Friday.
The Shanghai Composite index was up 2.01 percent at 3,152.81, after having hit a 14-month high during the session. For the week, it gained 5.82 percent.
China’s services sector last month expanded at the fastest pace in more than a decade as the easing of COVID-19-related lockdown measures revised consumer demand, a private survey showed, although companies continued to shed jobs.
Investors are turning to traditional heavyweights with lower valuations than growth stocks, including coal, nonferrous metals, insurance and real-estate companies, China Central Securities’ analyst Zhang Gang said.
Elsewhere in Asia, Japan’s TOPIX gained 0.62 percent to 1,552.33, down 1.59 percent for the week, while the Nikkei 225 rose 0.72 percent to 22,306.48 — although it dropped 0.91 percent over the week.
In Australia, the S&P/ASX 200 Index increased 0.42 percent to 6,057.9, up 2.61 percent from a week earlier.
South Korea’s KOSPI gained 0.8 percent to 2,152.41, rising 0.83 percent for the week.
The TAIEX gained 0.88 percent to close at 11,909.16 points, up 4.19 percent for the week.
Additional reporting by staff writer and Bloomberg
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