Hong Kong stocks close higher for first time in four days as report US is set to remove China tariffs lifts recovery hopes
- Optimism for China recovery rose as tariff decision could suspend levies on consumers goods including clothing while helping rein in inflation
- A positive report on purchasing managers’ outlook also boosted sentiment
The Hang Seng Index advanced 0.1 per cent to 21,853.07 at the close. The Hang Seng Tech Index lost 0.5 per cent, while the Shanghai Composite Index slipped less than 0.1 per cent.
Chinese property developers declined, limiting the gains on the broader market, amid concern about sluggish home sales. Longfor Group fell 2.7 per cent to HK$36.20 and China Overseas Land and Investment slid 1.8 per cent to HK$24.60.
The changes could include a suspension of levies on consumer goods including clothing and school supplies, as well as a way for importers to request waivers on the import taxes, the report said, citing unidentified people familiar with the matter.
A private report on the outlook of China purchasing managers also added to positive sentiment. The Caixin PMI Composite rose to 55.3 last month, the highest level since December 2020, while the PMI for the services industry climbed to 54.5, a level not seen since July last year. Readings above 50 indicate expansion, while readings below that level mean contraction. Both PMI gauges were below 50 for three consecutive months through May.
“A further gain on the market is expected,” said Hui Xiangfeng, an analyst at Yingda Securities. “China’s economy will make a significant improvement this quarter compared with the previous one because of the increased policy support. Furthermore, China’s monetary policy will continue to remain loose, an advantage over the rest of the world’s major economies that are tightening their policies.”
The Hang Seng Index has risen 19 per cent from a six-year low in March as China has contained the pandemic flare-up and rolled out measures to revitalise growth. The Hong Kong market has regained about US$600 billion in market capitalisation in that span and overtaken Japan as the world’s third largest exchange.
Tuya, a Chinese internet-of-things platform, was unchanged at HK$19.30 on the first day of trading in Hong Kong.
On the mainland, Anhui Hongyu Wuzhou Medical Manufacturer jumped 79 per cent from its initial public offering price to 46.94 yuan in its debut in Shenzhen. Another debutant, Chengdu Bright Eye Hospital, surged 57 per cent to 52.72 yuan.