Hong Kong stocks extend rally as bets pile up pro-growth measures are in the pipeline and on abating concerns over US interest rate increases
- Hang Seng Index finishes higher as expectations grow Beijing will unveil stimulus measures to prop up an economic recovery
- US jobs report which showed a cooling labour market but strong hiring, added to the upbeat sentiment
Hong Kong stocks extended gains on Monday after it posted last week its biggest rally in three months amid expectations Beijing will roll out measures to support an economic recovery and as concerns about higher US interest rates eased.
The Hang Seng Index rose 0.8 per cent to 19,108.50 at the close, adding to a 4 per cent surge on Friday for its biggest rise since March 1. The Hang Seng Tech Index gained 0.4 per cent and the Shanghai Composite Index closed 0.1 per cent higher.
Chinese chip maker Semiconductor Manufacturing International Corp jumped 6.3 per cent to HK$21.20 and online travel agency Trip.com Group added 4.4 per cent to HK$268.20. Insurer AIA Group rose 2.4 per cent to HK$79.90 and Hang Seng Bank rallied 2.7 per cent to HK$109.80. Tencent Holdings advanced 1.2 per cent to HK$338.20 and Alibaba Group Holding climbed 0.3 per cent to HK$82.75.
A US job report released on Friday also boosted sentiment, showing a cooling labour markets but strong hiring. The scenario bolstered the case for the Federal Reserve to parse more upcoming data before making the rate decision in its June 15 meeting.
“We also expect policymakers to step up easing measures around late June/early July and a consumption-led recovery to broaden out in the second half as the job market and income levels recover,” wrote strategists led by Laura Wang at Morgan Stanley in a report on Sunday. “These upcoming developments should help earnings cuts bottom out before reaccelerating in the third quarter this year. Early signs of US/China resuming direct communication are also emerging, pointing to a rising chance of a stabilisation trend in the second half.”
Hong Kong stocks have been volatile in recent sessions. The Hang Seng Index briefly slid into bear-market territory last week before staging a strong comeback after an agreement over lifting the US debt ceiling. Speculations also mounted about targeted stimulus measures by Beijing to boost property sales and consumption.