Alibaba, XPeng drive Hong Kong stocks to two-week high on China recovery outlook, Xi pledge
- The Hang Seng Index closed at its highest level since June 10, having gained 3.1 per cent for the week
- Alibaba Group, XPeng and WuXi Biologics led gainers, each rising by at least 5 per cent
The Hang Seng Index advanced 2 per cent to 21,719.06 at the close of trading on Friday, the highest since June 10. The benchmark gained 3.1 per cent for the week. The Hang Seng Tech Index climbed 4.1 per cent, while the Shanghai Composite Index added 0.9 per cent.
The stock rebound has been strengthening on optimism about China’s recovery from the impact of Covid-19 lockdowns. President Xi Jinping pledged this week that the nation will strive to achieve 5.5 per cent growth this year, fuelling bets that policymakers will take more action to overcome recent setbacks.
Premier Li Keqiang said in a cabinet meeting this week that China will extend a tax exemption on purchases of electric cars to spur consumption, while more cities including Zhengzhou and Wenzhou have eased curbs on home purchases.
“Hong Kong stocks are still attractive as valuations are low relative to the historical average,” said Tao Yifei, a fund manager at HFT Investment Management in Shanghai. The government is shifting its focus to bolstering growth and putting the economy back at the top of its priorities, he added.
Stocks held onto gains amid reports China is launching a cybersecurity probe into China National Knowledge Infrastructure, the country’s largest online academic database. That followed an antitrust probe into the company in May. The government was also said to be scrutinising online sales of drug on internet platforms, a local me
Sands China rallied 3.3 per cent to HK$15.10 and Galaxy Entertainment climbed 3.1 per cent to HK$42 after Macau extended their gaming concessions to the end of December, pending the implemenation of the new gaming law in the city.
An uptick in other markets in Asia also lifted sentiment. Yields on Treasuries fell because of a disappointing overnight report on US jobless claims.