Hong Kong stocks surge by most in 4 weeks as mainland China funds ramp up buying before Fed policy meeting

Hang Seng Index’s relative-strength indicator suggests the recent stock sell-off was overdone, and market may be poised for a turnaround

Mainland funds bought HK$7.4 billion of Hong Kong-listed stocks on Tuesday the most since June, adding to HK$28.1 billion of net purchases last week

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Bull statues outside the Exchange Square in Central, Hong Kong. Photo: Xinhua.

Published: 10:22am, 1 Nov 2022Updated: 4:53pm, 1 Nov 2022

Hong Kong stocks rallied by the most in about four weeks as mainland funds scooped up the biggest amount of shares since June after a sell-off pushed the local market into an oversold zone. Traders ignored concerns about the Federal Reserve policy meeting later this week.

The Hang Seng Index jumped 5.2 per cent to 15,455.27 at the close of Tuesday trading, the biggest advance since October 5 to climb out from a 13-year low. The Tech Index surged 7.8 per cent while the Shanghai Composite Index added 2.6 per cent.

Alibaba Group jumped 7.6 per cent to HK$66.10, Tencent soared 10.6 per cent to HK$227.40, and Meituan soared 11.9 per cent to HK$139.60. BYD gained 4.5 per cent to HK$183.60, while the trio of electric-vehicle makers, Nio, Li Auto and Xpeng, added 5.9 to 9.2 per cent.

The Tracker Fund rose 4.9 per cent to HK$15.55 as the city’s biggest exchange-traded fund attracted record inflows in recent weeks, while Hang Seng China Enterprises Index ETF gained 5.6 per cent to HK$52.80.

Mainland funds bought HK$7.4 billion (US$986.1 million) worth of Hong Kong-listed stocks on Tuesday, the most since June 30, according to Stock Connect data. They added HK$28.1 billion of net purchases last week, the biggest weekly inflow in the past year, according to Goldman Sachs.

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