Hong Kong stocks rebound from biggest decline in four weeks on upbeat corporate earnings reports

China Life Insurance signals a sharp gain in first-quarter earnings while China Unicom reports a 21 per cent gain from a year earlier

HSBC and HKEX are among a dozen of Hang Seng Index members to next issue their report cards in the coming days

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Some upbeat corporate earnings reports helped underpin risk appetite in Hong Kong stocks on April 22. Photo: Shutterstock

Published: 10:52am, 22 Apr 2021Updated: 5:03pm, 22 Apr 2021

Hong Kong stocks rebounded from their biggest setback in a month amid signs of better corporate earnings, while an overnight rally in US equities helped shore up buying sentiment.

The Hang Seng Index added 0.4 per cent to 28,755.34 at the close of trading on Thursday. The gauge slipped 1.8 per cent a day earlier for the biggest loss since March 24 amid concerns about rising Covid-19 cases. China’s Shanghai Composite Index slipped 0.2 per cent.

China Life Insurance rose 1.2 per cent to HK$15.76, after saying first-quarter profit may have risen as much as 75 per cent from a year ago. China Unicom was also among the gainers, rising by 0.7 per cent for a fifth day of advance. The phone carrier earlier reported a 21 per cent increase in first-quarter earnings to 3.84 billion yuan (US$592 million) from the year before.

More earnings reports are expected in the days ahead, with traders looking out for bets that will be able to withstand potential policy tightening by China amid signs of an economic rebound. Bank of Canada had earlier signalled its intention to dial back its asset purchases.

“The year of 2021 would be a game of earnings and valuations,” said Wang Jun, an analyst at BOC International in Shanghai. “As long as earnings growth holds up and liquidity tightening doesn’t overstep expectations, there’s a low chance of a systemic risk for stocks.”