Hong Kong, China traders pile in for beaten-down stocks, but experts warn to go in carefully as coronavirus news shifts quickly

Shanghai Composite soars 3.2 per cent; Hang Seng sees solid gains after big weekly loss

5G, Alibaba and Tencent could be options for aggressive traders, says analyst Kenny Wen, but most investors should ‘wait and see’

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A man wearing a protective mask walks on an unusually quiet Beijing street due to the coronavirus on March 1, 2020. Photo: EPA-EFE

Deb Price,Kathleen MagramoandIris Ouyang

Published: 1:10pm, 2 Mar 2020Updated: 5:37pm, 2 Mar 2020

Is it time to bargain hunt? Judging by the surge in buying sentiment in China and Hong Kong stock markets Monday, many investors are thinking so. But advisers urge caution.

The Shanghai Composite Index shot up 3.2 per cent to 2,971. China markets were broadly up. Infrastructure and related stocks soared, with 22 gaining by the daily limit of 10 per cent.

The Hang Seng Index added 0.6 per cent Monday to 26,292, led by gains in commerce and industry stocks. That follows a 4.3 per cent weekly drop at the Friday close.

Meanwhile, most major Asian markets advanced after the Bank of Japan said it will take necessary steps to stabilise financial markets. So did S&P 500 futures in America.

“It could be possible that the worst for Hong Kong and China markets has already passed,” said Louis Tse Ming-kwong, managing director at VC Asset Management.

“There is more confidence in buying Hong Kong and A-shares as factories in China resume production and [expectations rise for] more stimulus in the future. The markets also rebounded after heavy sell-offs for the last two weeks,” Tse said.