Hong Kong stocks snap two-day drop as weak manufacturing report spurs bets on China to deliver more support for economy

Local stocks rebound after a government report shows Chinese manufacturing slumped in February, stoking bets policymakers will respond next week

Lawmakers will gather in Beijing next week to set new annual economic targets

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An elderly looks at the electronic screen displaying the Hang Seng Index stocks outside a bank in Mong Kok, Hong Kong. Photo: Winson Wong

Published: 10:59am, 1 Mar 2024Updated: 5:17pm, 1 Mar 2024

Hong Kong stocks snapped a two-day drop after an official report showed a slump in manufacturing in China persisted last month. It heightened bets on stronger economic stimulus measures as policymakers gather next week to set economic targets.

The Hang Seng Index rose 0.5 per cent to 16,589.44 at the close, paring the drop this week to 0.8 per cent. The Tech Index jumped 1.7 per cent while the Shanghai Composite Index added 0.4 per cent.

PC maker Lenovo surged 4.8 per cent to HK$9.09, while Meituan rallied 11 per cent to HK$88.40 and China’s biggest chip maker SMIC added 1.6 per cent to HK$17.04. HSBC also climbed 1.6 per cent to HK$61.20, and Alibaba Group gained 0.2 per cent to HK$73.05.

Among top losers, online game operator NetEase slipped 1.9 per cent to HK$172.80 after fourth-quarter revenue trailed market consensus. New World Development slumped 6.8 per cent to HK$9.20 after revenue shrank 25 per cent in the second half of 2023.

China’s PMI manufacturing index fell to 49.1 in February versus 49.2 in January, marking a fifth straight month of contraction in activity, the statistics bureau said on Friday. Economists had expected a reading of 49, based on forecasts compiled by Bloomberg.

A separate PMI manufacturing gauge compiled by Caixin and S&P Global Ratings, which tracks smaller Chinese manufacturers, rose to 50.9 from 50.8 in January. The reading exceeded the consensus estimates of 50.7 among economists.