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
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.
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.
Both reports are likely to add more pressure on policymakers to respond next week when they gather for the annual legislative meeting, where economic and social targets are set for the coming year. The National People’s Congress will convene on Tuesday in Beijing.
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“More supportive measures are expected to come out to boost market sentiment,” said Gong Huijing, an analyst at Wanliang Securities in Guangzhou. “That will help economic recovery and corporate earnings.”
The Hang Seng Index climbed 6.6 per cent in February, the most since a 10 per cent rally in January 2023, buoyed by market intervention by China’s state-run funds and Hong Kong’s latest move to scrap its decade-old curbs on property financing and purchases.
The decision also fuelled a rally Midland Holdings, one of the city’s biggest real estate agency, on optimism a rebound in transactions will enhance its brokerage fees. The stock rose 1.1 per cent to HK$0.89, taking its speculation-driven surge to 37 per cent surge over the past five trading sessions.
Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 1.9 per cent and Australia’s S&P/ASX 200 added 0.6 per cent, while South Korea’s Kospi Index retreated 0.4 per cent.