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
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.
“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.
Luxshare Precision Industry, which makes earphones for the US company, rose 7.5 per cent, while its rival GoerTek increased 6.2 per cent.
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Markets in Asia-Pacific were mixed. Japan‘s Nikkei 225 slipped 0.1 per cent, while Australia’s S&P/ASX 200 was little changed. Singapore’s FTSE Straits Times Index slid 0.3 per cent. South Korea’s Kospi was closed for the Hangul Day national holiday, which celebrates the Korean language script.
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“The coronavirus situation remains volatile, and people are worried that the government may tighten restrictions which may hurt local spending as well as the economy,” said Stanley Chan, director of research at Emperor Securities.
“Shares of Hong Kong companies such as property developers have taken a hit,” he added. “But Chinese companies, particularly internet giants such as Tencent and Meituan Dianping, have performed quite well today. Investors expect these companies to report strong third quarter earnings.”
Property developers declined. New World Development lost 1.8 per cent. Wharf REIC retreated 1.9 per cent and Sun Hung Kai Properties dropped 0.7 per cent. Hong Kong Finance Investment dropped 81.4 per cent before trading was halted.
Chinese online food delivery giant Meituan Dianping rose 1.2 per cent, while benchmark heavyweight Tencent gained 0.8 per cent. Alibaba, the owner of this newspaper, slipped 1.2 per cent to HK$286.20.