Hong Kong shares end year up 39%

Hong Kong’s Hang Seng index finished the last trading day of 2007 up 39.4% from where it started the year, its biggest annual rise since 1999.

It closed the half-day session at 27,812.65, up 1.62% for the day on hopes that further US interest rate cuts will support local exporters.

But it has fallen 13% from the record high set on 30 October.

Of the other markets in the region, China’s Shanghai Composite rose 97%, while Tokyo’s Nikkei fell 11%.

US interest rate decisions are important in Hong Kong because its currency is pegged to the US dollar, so Hong Kong’s banks tend to follow the Federal Reserve’s lead.

Much of the strength in Hong Kong in 2007 has come from the launch of companies from mainland China.

But the falls in the last two months have come from problems with US sub-prime mortgage debt and delays to a scheme allowing Chinese investors to directly invest in Hong Kong-listed shares.

Source: BBC News


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