Hong Kong stocks power gains in Asia as reflation trades gain momentum, HSBC and Macau casino groups surge

Hang Seng Index chalked up best gain in Asia as traders sold recent tech winners, bought old-economy stalwarts

HSBC rose as much as 6.5 per cent after the lender recommended a bigger than expected dividend payout in its latest earnings report

Reading Time:2 minutes

A recent pattern has emerged with investors switching out of expensive tech and consumer stocks into cyclical old-economy companies on expectations for faster global economic recovery. Photo: Reuters

Published: 11:07am, 23 Feb 2021Updated: 5:15pm, 23 Feb 2021

Hong Kong stocks gained, pacing a rally in Asia-Pacific markets, as traders snapped up oil producers and property developers in a shift to the old-economy stocks on outlook for a faster economic recovery.

The Hang Seng Index jumped 1 per cent to 30,623.64 at the close on Tuesday, reversing an intraday loss of as much as 0.6 per cent. The Shanghai Composite Index dropped 0.2 per cent.

Both benchmarks tumbled on Monday as popular bets that thrived on sloshing liquidity for most part of 2020 – from Tencent Holdings and Meituan in Hong Kong to liquor distiller Kweichow Moutai in Shanghai and a slew of technology stocks in Shenzhen – bore the brunt of market sell-off.

CNOOC and New World Development rose by at least 3.4 per cent, leading so-called old-economy stocks higher as prices from crude oil to copper and aluminium extended their recent advances on growth reflation plays.

Galaxy Entertainment surged 8.9 per cent to HK$76.05 and Sands China climbed 7.5 per cent to HK$38.55. Casino operators benefited after Macau scrapped quarantine requirements on all mainland tourists travelling to the world’s biggest gambling hub.

HSBC surged by as much as 6.5 per cent after the release of its annual result on Tuesday, The UK-based lender, one of three note-issuing banks in Hong Kong, surprised the market by proposing a bigger than expected dividend following its latest earnings report.