UpdateChinese stocks gain for 5th day as tech-heavy ChiNext jumps the most in four months
Shanghai Composite rises 0.7 per cent, while Hang Seng retreats on signs of stocks being overbought
Chinese stocks rose for a fifth day on Tuesday, driven by a surge in the ChiNext index of small-caps which made its biggest gain since January 17.
Meanwhile, Hong Kong’s equity market fell from its highest close since July 2015.
The Shanghai Composite Index reversed earlier losses to advance 0.7 per cent, or 22.73 points, to 3,112.96 at the close. The ChiNext climbed 2.0 per cent to 1,814.94 as it continued to rebound after hitting its lowest level since the 2015 stock crash last week.
For Hong Kong, the market is still in an upward trend but it will suffer from profit taking from time to time before setting a new high
“China stocks continue to rebound, driven by small-caps which had previously dropped too rapidly,” said Wu Kan, a fund manager at Shanshan Finance in Shanghai. “There’s still room for the Shanghai Composite to rise to about 3,150.”
Investors bought consumer stocks on optimism their earnings will weather the clean-up of the financial sector. Liquor giant Kweichow Moutai rose 2.5 per cent to a record close of 430.19 yuan. Wuliangye Yibin gained 5.4 per cent to 47.60 yuan.
In Hong Kong, the Hang Seng Index dropped 0.1 per cent, or 35.65 points, from its highest close since July 2015 to close at 25,335.94. The Hang Seng China Enterprises Index of Chinese companies trading in the city slipped 0.2 per cent, or 16.66 points, to 10,433.69.