China’s stocks surge on economic recovery sign as bulls return from ‘golden week’ holiday, Hang Seng Index retreats on virus concerns

Chinese stocks surged after the golden week holiday, with CSI300 Index advancing 2 per cent; several Apple suppliers rallied

Hang Seng Index retreated 0.3 per cent amid a resurgence in Covid-19 infections; Everest Medicines jumped 32 per cent in its trading debut

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Passersby wearing protective face masks are reflected on a stock quotation board outside a brokerage in Tokyo, Japan. Photo: Reuters

Published: 10:50am, 9 Oct 2020Updated: 5:18pm, 9 Oct 2020

China’s stock market reopened with a bang after an eight-day holiday as a private economic report signaled a sustained recovery in the nation’s services industry. Hong Kong stocks retreated amid concerns about new measures to contain local coronavirus cases, but ended the week in the green.

The CSI300 index, which tracks the biggest companies on Shanghai and Shenzhen bourses, climbed 2 per cent to 4681.14 from the level on September 30. The gauge has risen by more than 14 per cent so far this year.

The Hang Seng Index slipped for a second day, easing 0.3 cent to 24,119.13 and trimming gains in the week to 2.8 per cent. The benchmark had posted big gains through Wednesday, buoyed by President Donald Trump’s improving health after his Covid-19 infection last Friday.

The China Caixin/Markit services PMI index rose to 54.8 in September versus 54 in the preceding month, today’s report showed. This was above the median expectation in a Bloomberg survey for a reading of 54.3, with the rate of expansion the sharpest for three months and among the quickest recorded over the past decade. The Composite PMI index, however, eased to 54.5 versus 55.1 previously. Readings above 50 indicate expansion.

“China markets made an upbeat return to trading following Golden Week,” said Stephen Innes, chief global markets strategist at Axi. A stronger-than-expected PMI reading “further encouraged positive sentiment around the economic outlook.”

Some Apple suppliers posted hefty gains after the iPhone and MacBook maker announced on Tuesday that it would hold its largest product launch of the year on October 13. Lens Technology, which produces and sells glass screens and covers for phone makers, rose 11.3 per cent on Shenzhen’s ChiNext technology board, pacing winners among CSI300 members.

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