Hong Kong stocks firm as China inflation report triggers hopes of consumer demand rebound

China inflation data showed consumer prices rose in February for the first time since last August

HSBC expects China’s central bank to cut banks’ reserve requirement ratio by 50 basis points and lower interest rates by 20 basis points in the second half of the year

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Screens showing the index and stock prices outside Hong Kong Exchange Square (HKEX) in Central. Photo: Sun Yeung

Published: 10:48am, 11 Mar 2024Updated: 3:30pm, 14 Mar 2024

Hong Kong stocks rose, starting the week on a firm note, after an official report over the weekend spurred optimism that demand conditions were improving in the world’s second largest economy, with positive investor flows also boosting sentiment.

The Hang Seng Index advanced 2.2 per cent to 16,587.57 at the close. The Hang Seng Tech Index gained 2.9 per cent and the Shanghai Composite Index added 0.7 per cent.

Alibaba Group Holding climbed 2 per cent to HK$72.80 and Tencent Holdings added 3.2 per cent to HK$278.60. JD.com rallied 6.4 per cent to HK$98.55 and Meituan advanced 5.3 per cent to HK$89.20. Xinyi Solar Holdings surged 11 per cent to HK$6.57 on expectations that China’s power grid companies will accept more electricity generated by solar power.

Adding to the positive mood was a proposal by the head of Hong Kong’s securities regulator, in his capacity as a delegate attending the National People’s Congress, that the investment barrier for mainland Chinese traders should be lowered to lift the stock market turnover and boost sentiment.

“It would be huge for Hong Kong stocks and boost demand for trading,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “That would also put a floor on the market, particularly when foreign investors led by the US are fleeing Hong Kong’s market.”

Jewellery retailer Chow Tai Fook rallied 3.3 per cent to HK$12.06 as growing demand for gold as a store of wealth in the current uncertain environment triggered a record-breaking rally in the price of the metal.

China’s property sector was broadly weak after the housing minister said that the government would allow some troubled industry players to go bankrupt.

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Hong Kong stocks firm as China inflation report triggers hopes of consumer demand rebound

China inflation data showed consumer prices rose in February for the first time since last August HSBC expects China’s central bank to cut banks’ reserve requirement ratio by 50 basis points and lower interest rates by 20 basis points in the second half of the year

China inflation data showed consumer prices rose in February for the first time since last August

HSBC expects China’s central bank to cut banks’ reserve requirement ratio by 50 basis points and lower interest rates by 20 basis points in the second half of the year