Hong Kong stocks rise to eight-month high in late charge amid Covid-19 woes with market valuation at decade-high
- Hang Seng Index closed at an eight-month high in late-trading rally as vaccine outweighed concerns over new wave of Covid-19 infections
- Rally in November has lifted market valuation to most expensive in a decade, based on Hang Seng Index’s price-earnings ratio
The Hang Seng Index added 0.4 per cent to 26,588.20 at the close, the highest since March 5. The 50-members in the index now traded at 14.6 times earnings on average, the most expensive in a decade, according to Bloomberg data. The Shanghai Composite Index slipped 0.3 per cent to 3,402.82.
Alibaba Group Holding rose for a third day on a local media speculation that more Hong Kong-listed companies will be added to the Stock Connect, a cross-border investment channel linking the city and the mainland. Chinese smartphone maker Xiaomi retreated from its record high before an earnings report.
The increase in Hong Kong stocks dovetailed with a bullish trend in other major Asian markets, where Japan’s Nikkei 225 rose 2.5 per cent and Australia’s S&P/ASX 200 jumped 1.3 per cent. They rallied in tandem with overnight gains in US equities.
“Before the real risk on rotation party starts, the workability of mass vaccinations must be overcome,’’ said Stephen Innes, a strategist at Axi. “The most subjugated sectors dependent on human interaction will rebound dramatically.”