China Bucks U.S. Losses

Hong Kong and China defied U.S. market losses for the second day running in Wednesday's trading, with the gains pushing the markets past key psychological benchmarks.

The Hang Seng rose 465 points, or 1.61%, to 29,345, passing the 29,000 level for the first time in three weeks. On the mainland, the Shanghai Composite Index jumped 127 points, or 2.6%, to 5,042, ahead of the 5,000 benchmark. Lower oil prices, a falling yen, an anticipated U.S. interest rate cut and traditional end-of-year goodwill are the reasons for prevailing bullish sentiment, say market commentators.

"The Hang Seng may have the chance to penetrate the 30,000 level, but it will still be quite difficult to break by the end of this year," says Castor Pang, a buyside analyst for Sun Hung Kai in Hong Kong.

"It seems now that the U.S. interest rate is 100% likely to happen, which should help local property stocks to have an advancement. Overall money growth can help to elevate the banking sector and the steel stocks," says Pang.

Pang adds that the traditional increase in retail sales in December is another major factor that could push equity prices higher.

Commodity stocks in both Hong Kong and Shanghai rebounded from recent selling on news that China's Baosteel may tender an offer for Anglo-Australian miner Rio Tinto(RTP Quote).