
Hong Kong and China markets rise on strong manufacturing data from world’s second-largest economy
- Hang Seng Index rose 0.9 per cent, while the Shanghai Composite gained 1.8 per cent
- Chinese manufacturing reported sharpest improvement in 10 years in November, according to Caixin/Markit PMI
The Hong Kong and China markets started December on a strong note, boosted by positive manufacturing data from the world’s second-largest economy released on Tuesday.
“The official and non-official manufacturing data shows the economic recovery in China had strong momentum going forward, boosting sentiment in the Hong Kong and mainland markets,” said Kenny Tang Sing-hing, the co-founder and chief executive of Royston Securities.
China’s official manufacturing PMI, released on Monday, stood at 52.1 in November, rising from 51.4 in October to its highest level since September 2017.
Cyclical stocks, or those that are particularly sensitive to economic cycles, such as Chinese financials, outperformed on Tuesday, Tang said.
On the mainland, Chinese banks led the gains, with a gauge tracking the sector rising 4 per cent according to Eastmoney.com. Bank of Xi’an and Jiangsu Zijin Rural Commercial Bank both rose by the upper trading limit of 10 per cent.
Chinese financials gained in Hong Kong as well. ICBC added 3.7 per cent, while Ping An Insurance rose 3.6 per cent. China Life Insurance also rose 2.5 per cent.
Wuxi Biologics, which is researching coronavirus drugs, led the gains among blue chips on the benchmark Hang Seng Index. Its existing shares gained 6.9 per cent, while new shares that emerged after a stock split last month gained 0.9 per cent.
Brokerage UOB Kay Hian maintained a buy rating for Meituan-Dianping and raised its target price to HK$343.00 from HK$328.00, on expectations that the company would continue to expand its market share in the food delivery segment. It was also expected to increase its presence in the fresh groceries segment, analyst Julia Pan said in the report on Tuesday.
Sino Biopharmaceuticals plunged 11.8 per cent to HK$6.88, after its third-quarter earnings missed expectations. The company also reported that its net profit for the first nine months of the year had dropped by 18 per cent to 1.85 billion yuan, in a filing to the stock exchange after the market close on Monday. The Chinese government’s centralised drug procurement programme has led to cuts in the prices of some of the company’s products, it said.
Investors also weighed tightened social distancing restrictions in Hong Kong amid rising Covid-19 infections against new developments on the coronavirus vaccine front.
Yunnan Jianzhijia Health Chain, which operates drug stores in China, gained 44 per cent to 104.96 yuan from its initial public offering price of 72.89 yuan in Shanghai.
