Hong Kong stocks gain on hopes of strengthening recovery amid easing of travel restrictions and improved Chinese data
- Hang Seng Index closes 0.4 per cent higher on Friday, but ends up with a 0.6 per cent loss for the week
- Rising stock markets across the region added to the positive sentiment
Hong Kong stocks held onto gains on optimism that further reopening of the city will boost growth and China can sustain its recovery from the fallout of the pandemic.
The Hang Seng Index advanced 0.4 per cent to 21,725.78 at the close, paring an intraday gain of as much as 1.5 per cent. For the week, the benchmark slid 0.6 per cent. The Hang Seng Tech Index climbed 0.6 per cent, while the Shanghai Composite Index slipped 0.3 per cent.
While the official report by the statistics bureau next week may show that China’s growth slowed to 1 per cent in the second quarter, investors are likely to take the data in their stride, believing that the worst is already over and growth will pick up from here.
“Policy easing and reopening remain the key themes to monetise China’s idiosyncratic alpha,” strategists led by Kinger Lau at Goldman Sachs wrote in a note on Friday. “Besides conventional monetary and fiscal measures, China is also loosening in other key policy cohorts that are consequential to the real economy and asset markets, notably internet regulation, the housing market policy and Covid-related restrictions.”
Stock market gains across the region also added to the positive sentiment, with benchmarks in Japan and Taiwan showing the biggest gains in excess of 1 per cent. Some Federal Reserve officials reassured investors that the US central bank can curb runaway inflation without plunging the economy into a recession.
Six companies started trading in Hong Kong and the mainland’s exchanges on Friday, with only two holding onto gains.
The best performer was waste water treatment company Beijing China Sciences Runyu Environment Technology, which surged 110 per cent to 8.03 yuan in Shenzhen, while the other gainer was Xuan Wu Cloud Technology Holdings, which rose 0.6 per cent to HK$6.28 in Hong Kong.
Property management firm Lushang Life Services tumbled the most. It slumped 25 per cent to HK$4.43 in Hong Kong, while the declines in the other three debutants ranged from 1.5 per cent to 15 per cent.