Hang Seng closes higher as analysts hope for China rebound

<p>The Hang Seng in Hong Kong is higher as analysts hope a rebound for China is due.</p>

The Hong Kong Hang Seng index has closed higher in trading this morning (October 18th), as analysts remain optimistic that the Chinese growth slowdown is steadying and the country is due a rebound.

According to fresh data from the world's second-largest economy's National Bureau of Statistics, the nation's gross domestic product (GDP) grew 7.4 per cent in the third quarter of the year, slowing from the second quarter's rate of 7.6 per cent GDP.

This makes the July-September period the seventh in a row Chinese economic growth has slowed.

Last year, the country expanded by 9.2 per cent and over the past three decades the average has been near ten per cent.

Indeed, the figure for the third quarter of 2012 was the weakest since the first three-monthly period of 2009, when the global financial crisis weighed heavily on the Asian superpower's economy, resulting in weak growth of 6.6 per cent.

Since then, the country's export and manufacturing-heavy marketplace has suffered from lower orders, as the international financial troubles hold back orders to the sovereign debt-addled eurozone and US, which is grappling with a gaping public deficit.

However, amid reports the situation is difficult, key economic indicators alongside GDP have signalled that a rebound could be on the cards.

This would be excellent news for China, as long-term premier Wen Jiabao is preparing to step down, with his role tipped to be taken over by vice-president Xi Jinping next year.

Indeed, China's industrial production was up by a greater-than-expected 9.2 per cent in September year-on-year, while retail sales were 14.2 per cent higher than the same time in 2011.

Furthermore, Beijing has announced a package of stimulus measures aimed at boosting domestic consumption and sustaining growth, with the central bank lowering the amount of money banks need to keep in reserve in order to boost lending.

At close of play this morning in Hong Kong, the Hang Seng was 0.4 per cent higher to an index value of 21518.7 points.

Learn about CFD trading strategies and the stock market at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.