Hong Kong stocks near 8-month highs on economic optimism after solid trade data and as more Chinese cities lift home buying restrictions

Hangzhou is the first major city in China to scrap curbs on home purchases, and follows similar relaxations announced by the southwest city of Chengdu last month

The Hang Seng Index has gained more than 4 per cent this month, extending a 7.4 per cent advance in April prompting Morgan Stanley to advise investor caution

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A Hong Kong Exchanges flag is hoisted beside a Chinese national flag outside the Hong Kong Stock Exchange in Hong Kong June 7, 2016. Photo: Reuters

Published: 10:57am, 9 May 2024Updated: 4:59pm, 9 May 2024

Hong Kong stocks rose close to their eight-month highs on Thursday on optimism that stability will return to China’s economy after more policy-loosening steps, targeting the floundering property market, were unveiled and after China’s exports and imports both exceeded estimates in April.

The Hang Seng Index climbed 1.2 per cent to 18,537.81 at close, after a two-day, 1.4 per cent drop. The Hang Seng Tech Index gained 2 per cent and the Shanghai Composite Index added 0.8 per cent.

Longfor Group Holdings jumped 3.7 per cent to HK$11.92 and its peer China Resources Land added 2.7 per cent to HK$29.95 after the city of Hangzhou removed all the restrictions on home purchases.

Semiconductor Manufacturing International Corp rallied 4.7 per cent to HK$16.02 ahead of the release of its first-quarter results.

“There are growing expectations about policy support and that has apparently lifted market sentiment,” said An Qingliang, an analyst at Guorong Securities. “More follow-up measures will be implemented at a faster pace going forward, to resolve the crisis in the property market and defuse the risks. These steps will help reinforced expectations about a pickup in the economy.”

A customer is looking at a model of a property at a real estate sales centre in Hangzhou, Zhejiang Province, China, on January 17, 2024. Photo: Getty Images

Hangzhou, where e-commerce giant Alibaba Group Holding is based, is the first major city in China to scrap curbs on home purchase after a Politburo meeting by the end of April pledged to tackle the woes on the housing market. The west city of Xian followed Hangzhou on Thursday in removing all home purchase restrictions. Hangzhou and Xian joined Chengdu, the capital city of southwest Sichuan province that said last month that it would no longer review qualifications on homebuyers.