South China Morning Post
Advertisement
Advertisement
Hong Kong stock market
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
A man walks on the street, in front of the large screen displaying the latest stock exchange data, in Shanghai on August 28. Photo: EPA-EFE
BusinessChina Business

Hong Kong stocks climb to 2-week high as BYD, Ping An Insurance gain on earnings outlook

  • Stocks added to Monday’s 1 per cent rally as BYD’s stronger results underpinned confidence in earnings outlook
  • Some 57 of Hang Seng Index’s 80 members have published their latest report cards, averaging 1.8 per cent growth in earnings
Hong Kong stock market
Zhang Shidong
Zhang Shidongin Shanghai
Why you can trust SCMP
Hong Kong stocks rose for a second day to a two-week high, adding to gains from China’s move to cut transaction costs, as stronger earnings from BYD lifted sentiment on EV makers.

The Hang Seng Index advanced 2 per cent to 18,484.03 at the close of Tuesday trading, following a 1 per cent rally on Monday. The Tech Index gained 2.7 per cent and the Shanghai Composite Index added 1.2 per cent.

China’s biggest EV maker BYD surged 5.6 per cent to HK$237.80 after second-quarter profit more than doubled from a year earlier. Ping An Insurance Group rose 3.2 per cent to HK$46.85 while hotpot restaurant operator Haidilao added 2.8 per cent to HK$22, before their earnings reports later on Tuesday.

Elsewhere, carmaker Xpeng added 2.9 per cent to HK$74.30, while peer Nio appreciated 2.4 per cent to HK$88.55. Alibaba Group Holding jumped 2.3 per cent to HK$90.90, and Tencent Holdings rose 1.3 per cent to HK$329.40. Country Garden Services rallied 9.9 per cent to HK$9.45.

“A pickup in stocks can still be expected after measures to rebuild confidence and support the market,” said Yu Tianxu, an analyst at Wanlian Securities. “We recommend big companies, particularly those state-backed ones” with improving fundamentals and high dividends.

China cut stamp duty on stock trading on Monday for the first time since 2008 and the securities regulator unveiled measures such as a reduction in the requirement ratio for margin trading to bolster confidence. However, Nomura cautioned the rally is likely to be short-lived without the support of big stimulus packages.
Sentiment also improved after US Commerce Secretary Gina Raimondo met her Chinese counterpart Wang Wentao on Monday. They agreed to set up a working group to resolve trade and investment disputes. Raimondo, who is the fourth high-ranking US official to visit China this summer, also met Premier Li Qiang on Tuesday.

“This sounds more like the kind of pragmatic and decisive breakthrough that is required,” said Clifford Bennett, chief economist at ACY Securities. “Markets are correct to respond favourably to these developments.”

First-half profit for Ping An probably increased 3.7 per cent from a year earlier to 62.5 billion yuan (US$8.6 billion), according to analysts tracked by Bloomberg, while Haidilao may have returned to a profit of 816.5 million yuan in the same period.

Fifty-seven of the Hang Seng Index’s 80 members have released their quarterly or interim results so far, registering an average 1.8 per cent growth in earnings, according to Bloomberg data. The members posted an average 5.5 per cent increase in 2022.

Other major Asian markets rose. Japan’s Nikkei 225 climbed 0.2 per cent, while South Korea’s Kospi gained 0.3 per cent and Australia’s S&P/ASX 200 added 0.7 per cent.

Post