Hong Kong stocks rebound from taper tantrum sell-off as benchmark index gets biggest revamp since 1969 inception
- Three new Hang Seng Index members – Alibaba Health, Longfor and Haidilao – rally before they officially join from March 15
- Hang Seng Indexes unveils plan to increase benchmark index membership to 80 next year, and 100 eventually in biggest makeover since inception
The Hang Seng Index climbed 1.6 per cent to 29,452.57 at the close on Monday. The gauge tumbled 5.2 per cent last week for the steepest loss since March 13, after US government bond yields jumped to a one-year high on policy tightening angst.
The Shanghai Composite Index added 1.2 per cent, brushing aside a Sunday report showing a decline in China’s official manufacturing index in February as the Lunar New Year holiday affected production.
Meituan, Anta Sports Products and Wuxi Biologics were the biggest index gainers, rising by at least 6.5 per cent. Alibaba Health Information Technology, Haidilao International and Longfor Group rose by 3.7 per cent to 9.4 per cent, after they were added to the benchmark in a review. They will officially join on March 15.
“As the global economy has not fully recovered to the pre-Covid-19 level, the pace of policy normalisation this year is likely to be modest,” said Wendy Liu, head of China strategy at UBS Group. “Marginal monetary policy tightening may lead to market corrections, but the probability of triggering systemic risk is low.”
It could take investors some time to re-price domestic policy normalisation, a global economic recovery and rising global rates, she said in a report to clients.