Hong Kong shares post best gain in 6 weeks but sustainability in doubt

By Reuters/Samuel Shen, Pete Sweeney   May 25, 2016 | 01:54 am PT
Hong Kong stocks jumped more than 2 percent on Wednesday in their best day in six weeks, inspired by solid overnight gains in U.S. and European markets.

But some analysts said the rebound was driven largely by technical factors, and remained worried about the near-term outlook given the backdrop of a sluggish Chinese economy and a possible U.S. rate hike as early as next month.

The Hang Seng index rose 2.7 percent to 20,368.05 points, while the China Enterprises Index gained 2.8 percent to 8,536.38.

Alex Wong, Hong Kong-based director of Ample Finance Group, said the HSI's rebound won't last long.

"The recent pattern in Hong Kong has been a sharp rebound following many sluggish sessions, but the index will then go lower again," Wong said.

Most sectors in Hong Kong rose, with energy and financial shares leading the charge. The HSI has been oversold for most of this month, according to its relative strength index (RSI).

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