Chinese benchmark indices recoup Covid-19 losses, Hong Kong stocks kick off third quarter with biggest gain in over three months
- Shanghai Composite rises to its highest level in five-and-a-half months, Shenzhen Composite Index records biggest gain in four-and-a-half years
- Hang Seng Index closes at highest level in three-and-a-half months, Tencent rises 4 per cent
Major mainland Chinese stock indices have now recouped losses suffered since January 23, when a citywide quarantine in Wuhan, capital of the central Hubei province, effectively kicked off a three-month lockdown in many parts of the country.
The markets rose after US stocks gained overnight on hopes an effective coronavirus vaccine made by a recognised company could be available soon. The Shanghai Composite Index and the Shanghai A Share Index both closed on Thursday above their pre-Covid-19 levels, while two benchmarks in Shenzhen soared to their highest closes since then. The first major economy to enter a lockdown, China is also the first to slowly recover from it.
The Shanghai Composite advanced 2.1 per cent to 3,090.57, its highest level in five-and-a-half months, and the Shenzhen Composite Index added 1.3 per cent to 12,269.49, its biggest gain in four-and-a-half years. Transaction volumes in Shanghai and Shenzhen crossed one trillion yuan (US$141.5 billion) for the first time in four months, according to Wind Information.
“The economic recovery is going well, while policies remain stable,” said Shen Zhengyang, an equity strategist at Northeast Securities in Shanghai, adding that the market was increasingly active as funds were looking to invest the money they had raised. “This capital is looking for stocks that have been lacking gains, such as those in the financial, property and construction materials sectors.”
In Hong Kong, the Hang Seng Index closed at its highest level in three-and-a-half months on the first trading day of the third quarter. After observing a one-day holiday on July 1 marking the formation of the Hong Kong Special Administrative Region, the index rose 2.9 per cent to 25,124.19, its highest level since March 11.
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Index heavyweight Tencent Holdings soared 4 per cent to HK$518.5, the first time that the technology giant’s stock has crossed HK$500 at the close. Thursday was the third time it has broken through the HK$500 mark in intraday trading, and has surged 38 per cent this year.