Hong Kong stocks hit four-month high as China reopening bulls power market’s best New Year start since 2018

The city’s stock benchmark erased an earlier drop of as much as 2.4 per cent as China reopening bulls charged in despite weak data, Covid-19 outbreaks

Macau casino operators led gainers while tech stocks also jumped on hopes for a better regulatory conditions

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The Hang Seng Index is looking to close above 20,000 points for the first time since August 2022. Shutterstock Images

Published: 10:19am, 3 Jan 2023Updated: 4:51pm, 3 Jan 2023

Hong Kong stocks produced the best start to a year since 2018, lifting the market to a four-month high as traders rebuilt positions while shrugging off a series of weak economic data out of China.

The Hang Seng Index jumped 1.8 per cent to 20,145.29 on Tuesday, closing above the 20,000-point level for the first time since August 26. The Tech Index added 2.5 per cent while the Shanghai Composite Index gained 0.9 per cent, both also overturning earlier setbacks.

Alibaba Group Holding added 2.8 per cent to HK$88.65, NetEase jumped 3.6 per cent to HK$118.60 and BYD gained 4.7 per cent to HK$201.60. Casino operator Sands China and rival Galaxy Entertainment both soared 3.9 per cent to HK$26.90 and HK$53.60, respectively.

Today’s gain represented the biggest opening-day rally since 2018 when the Hang Seng surged by almost 2 per cent. The Shanghai benchmark posted its strongest new-year rally since a 1.2 per cent rise in 2020.

“The local market is now waiting for the reopening of borders and watching the Covid situation closely,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International. There are still a lot of uncertainties, which are set to bring some big swings in the market, he said.

The Hang Seng Index has appreciated almost 40 per cent over the past two months on the back of China reopening optimism, helping restore over US$1.1 trillion of capitalisation in the broader Hong Kong market.