Hong Kong stocks snap back-to-back losses as UBS sees return of confidence in economy
- Hang Seng Index gained on the back of an official report signaling the city’s economy is recovering from its worst recession on record
- Mainland China markets remain shut through Wednesday for Labour Day break
Sinopec led gainers among blue chips, rising 4.1 per cent to HK$4.08, while PetroChina added 3.5 per cent to HK$2.92 as oil rallied for two days to above US$65 a barrel. Chinese apparel producer Anta Sports rose 3.1 per cent to HK$142.70, while smartphone maker Xiaomi added 1.4 per cent to HK$24.80.
“We believe the growth recovery provides room for the government to focus more on other tasks,” William Deng, North Asia economist at UBS said in a note to clients on Tuesday. “In the near term, the most important task is to effectively combat Covid-19 and reduce the risk of another local wave.”
The economic performance reflects Hong Kong’s capacity to rebound from shocks and is likely to enhance confidence in its economy, the Swiss investment bank said. UBS likes market laggards, with relatively low valuations and fundamentals driven by potential border reopening and demand recovery, strategist Angus Chan added.
Analysts at Nomura also expect Hong Kong’s growth to remain solid in coming months, on the back of a largely stable local Covid-19 situation, a push for speedier vaccination rate and further easing of social distancing rules, they said in a report.
In other Asia-Pacific markets, South Korea’s Kospi erased losses to rise 0.6 per cent while Australia’s S&P/ASX 200 added 0.6 per cent.