Hong Kong stocks stampede into a bull market, while Shanghai sees biggest one-day gain in five years on expected China recovery
- Chip maker SMIC soars more than 20 per cent ahead of listing in Shanghai
- Shanghai sees biggest single day percentage gain in five years
Hong Kong stocks stampeded their way into a bull market Monday, joining the US and other global exchanges that clawed their way out of bear territory triggered by the coronavirus.
How did the Hong Kong bulls wrest control from the bears in just over three months?
Investors can thank record mainland inflows, sexy new listings, massive global stimulus, and positive data signalling recovery in China, all of which gave them a much-needed confidence boost, analysts said. Traders also set aside worries about Beijing’s tightened grip over the city. And there was also some good-ole bravery – as traders bet the worst was behind and decided it was time to bargain hunt.
Meanwhile, the Shanghai Composite Index saw its biggest one-day percentage gain since the volatile summer of 2015, when the stock market bubble burst.
Hong Kong’s Hang Seng Index on Monday gained a whopping 3.8 per cent – just shy of 1,000 points – to 26,339.16, led by information technology and consumer staples stocks. That surge was enough to power it into a bull market.
“We have entered a bull market. When the markets try to turn from pessimism to optimism, from a bear to bull, the turnover for those couple of days is huge. Today is the day,” said Louis Tse Ming-kwong, managing director of VC Asset Management.