Hong Kong stocks: index hits 9-month highs, tops 19,000 on earnings optimism and policy support hopes

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General view of Hong Kong Exchange Square in Central. Photo: Jelly Tse.

Published: 10:53am, 13 May 2024Updated: 5:16pm, 13 May 2024

Hong Kong stocks rose to nine month highs on Monday amid optimism that corporate earnings will improve and hopes of policy support after China released data over the weekend that showed credit expansion was weak in the world’s second-largest economy.

The Hang Seng Index rose 0.6 per cent to 19,115.06 at close to finish at its highest since August 10. The Hang Seng Tech Index added 1.4 per cent but the Shanghai Composite Index retreated 0.2 per cent.

Alibaba Group Holding rallied 4.1 per cent to HK$81.15 and Tencent Holdings climbed 1.9 per cent to HK$378.20, ahead of their quarterly earnings announcements, due on Tuesday. Biopharmaceutical firm Wuxi AppTec advanced 4.5 per cent to HK$39.80, after the US introduced a revised bill that offers a grace period until 2032, before a possible ban on Chinese drug makers from doing businesses with the Federal government.

Casino operator Sands China gained 4.2 per cent to HK$20.90 after a move to add eight more mainland cities to a programme that allows individual travellers to visit the gambling hub of Macau. Currently, travellers from these cities can only visit Macau as part of official tour groups.

Bronze sculptures of bulls, the symbol of the Hong Kong stock exchange, at the Exchange Square in Central. Photo: Warton Li

“There is more upside for Hong Kong stocks as China keeps loosening the restrictions on the property market and as corporate earnings outlook has improved,” said Fang Yi, an analyst at Guotai Junan Securities in Shanghai.

The Hang Seng Index has extended its world-beating rally from April, rising more than 7 per cent this month, after key cities like Hangzhou and Xian scrapped all the curbs on home purchases support for the property market gathered pace nationwide. Exports and imports both exceeded the consensus estimates last month.