Bank stocks lead Hong Kong, China rally as Macron looks set for French presidency

Hong Kong stocks rallied to a one-month high and recorded their biggest daily rise in five weeks, thanks to the outcome of the first round of voting in France’s presidential election.

The Hang Seng Index rose 1.3 per cent or 316.5 points to 24,455.9 on Tuesday. The Hang Seng China Enterprises index gained 1.6 per cent or 164.4 points to 10,272.1.

The strong performance followed the victory of centrist candidate Emmanuel Macron in the first round of France’s presidential election.

“Hong Kong stocks joined the rally of global markets to trade higher as political concerns are reduced as France is less likely to follow a Brexit-like path,” said Hanna Li, strategist for UOB Kay Hian. “The companies with business involved in Europe outperformed on Tuesday.”

Several major international banks led the gains, with HSBC and Standard Chartered both advancing 1.3 per cent to close at HK$63.8 and HK$71.6, respectively. Chinese mainland banks also joined the rally. The world largest bank by assets, ICBC, was up 2.2 per cent to HK$5.1, and Bank of China climbed 1.9 per cent to HK$3.8. Bank of Communications added 2.9 per cent to HK$6.1 while Agricultural Bank of China jumped 2.3 per cent to HK$3.6.

Hong Kong local property developers were also among the big winners. Tycoon Li Ka-shing’s conglomerate CK Hutchison rose 1.9 per cent to HK$96.9. while CK Property tacked on 1.2 per cent to HK$55.2 after several investment banks, including Bank of America Merrill Lynch, raised their target price on the company after the Australian government granted approval for it to acquire energy network operator Duet. New World Development added 1.2 per cent to close at HK$9.7.

HNA Holding, the owner of Hainan Airlines and a major buyer of land for development in Hong Kong in 2016, rose 9.2 per cent to close at 25 HK cents after slumping to a two-year low on Monday when fugitive businessman Guo Wengui was reported to have made allegations tying the company’s acquisitions to corruption involving Chinese leaders and their family members. HNA’s spokesman declined to comment on the allegation.