Boosted by consumer stocks, China stocks end first trading day of Year of the Pig higher

Better earnings reported by luxury brands boosted sentiment in the Hong Kong and China stock markets on Monday, with all mainland Chinese gauges finishing higher on the first trading day of the Year of the Pig.

The benchmark Shanghai Composite Index had traded flat during most of the morning session, but steady gains during the afternoon led it to a gain of 1.36 per cent, or 35.67 points. The gauge closed at 2,653.9, extending gains made over the three days before the Lunar New Year holiday. Its daily turnover stood at 137.3 billion yuan (US$20.2 billion). In Hong Kong, the Hang Seng Index closed up 0.71 per cent, or 197.52 points, at 28143.84. The turnover on its mainboard stood at HK$84.13 billion (US$10.7 billion).

Consumer stocks led the gains, with liquor stocks finishing the day as top gainers in Shanghai as well as Shenzhen. In Shanghai, Kweichow Moutai rose 4.7 per cent to 725.3 yuan; in Shenzhen, liquor stock Wuliangye Yibin closed 5.7 per cent higher at 64.7 yuan, its highest level since October 2018. Wuliangye has risen by 25 per cent this year, according to Bloomberg.

Electronics giant Midea Group, another consumer stock, was up by 4.1 per cent at 46.98 yuan in Shenzhen, while Wens Foodstuffs Group was up by 6.57 per cent at 30 yuan. The Shenzhen Component Index ended 3.06 per cent, or 235.05 points, higher at 7919.05. Its turnover reached 182.6 billion yuan.

Alex Wong, director at Ample Finance Group, said investor sentiment had been boosted by high-end foreign consumer brands such as Estée Lauder, which reported last week that sales from China had continued to deliver strong growth in the December quarter.

“Recent earnings from high-end consumer brands like Estée Lauder and LVMH, which have recently reported improved sales from China, have briefly helped improve sentiment regarding Chinese consumer stocks,” said Wong.