Hong Kong stocks rebound from longest losing streak since 1984

Hong Kong's recouped from the losses by two percent after recording longest losing streak since 1984. Oil stock recovered as the US Federal Reserve meeting is set to unclear the uncertainty looming over interest rate hike.

Chinese stocks turned firm. Hong Kong and China indices rose on renewed buying support. Teh Chinese government didn't raise retail petrol prices. The sharp rally in oil stocks boosted the indices.

The news that China is issuing government bonds in 2016 in support of its economy has brought cheer to the markets. Chinese shares started recovering following this news. Hang Seng index rose 2.2 percent to 21,732 points during intra-session on Wednesday. 

According to a report by Reuters, capping the nine-session run of losses indicating its worst phase of downward movement since July 1984, equities on Hong Kong Stock Exchange recovered marginally ahead of the outcome of the US Federal Reserve meeting.

The Hong Kong stocks fell for nine sessions registering its longest run of losses since July 1984. During this time, Hong Kong was in the process of handing over to China by Britain. Belle International Holdings led the downfall of equities on Hong Kong bourse.  

According to a report by Bloomberg, the overall sentiment remains weak and uncertain until a clear picture about the interest rate emerges. China's impact on Hong Kong is significant, said analysts, who doubt the sustainability of the latest recovery.

The Hang Seng's relative strength index fell to 31.4. The index trades at 9.3 times reported earnings. The relative strength index is hovering below the 10-year average of 12.7 and 47 percent below the MSCI all-country world index's ratio.

China's blue-chip CS-1300 index added 0.1 percent to 3,697.25 points, while Shanghai Composite index gained 0.4 percent to 3,525.14 points. Both the markets gained from the fresh rally triggered in oil stocks.

The Chinese government has delayed the expected cuts in retail petrol and diesel prices. This also added support to the oil stocks.

South China Morning Post (SCMP) reports that Hong Kong stocks rose the most in two months on Wednesday. The market players are eagerly waiting for the outcome of the US Federal Reserve meeting.

The decision on interest rate hike will be announced later in Wednesday as per the US day time. China Construction Bank, HSBC, Sinopec and PetroChina stocks rose on Hong Kong trading.

The Chinese government has announced that it didn't reduce the retail oil price as part of its objective to restrain oil consumption. This will also protect the environment, said the government.

However, energy analysts opine that this decision will benefit refiners as it enhances their margins. 

Referring to PetroChina, Sinopec and CNOOC, Oliver Barron, an analyst at China-focused investment bank NSBO, said in his report that "we believe there is an ulterior motive to protect profits of the three oil majors.

PetroChina has been selling pipeline assets to remain profitable this year and this move sounds like it's less about air pollution and more about profitability worries."