Hong Kong stocks climb by most in six weeks as traders shake off bubble talks, markets turn to China for policy direction
- Galaxy Entertainment, ICBC led gainers as traders look forward to policy support as China gets ready for the ‘Two Sessions
- Bubbles tend to get pricked by higher rates, but central bankers are keeping their needles safely tucked away for now, Schroders says
The Hang Seng Index surged 2.7 per cent to 29,880.42 at the close on Wednesday, the biggest gain since January 19. Gaming stocks led gainers after Macau scrapped a requirement for visitors to produce negative Covid-19 test results before entering the gambling hub, while Chinese banks also gained. The Shanghai Composite Index added 2 per cent.
Guo’s comments, however, should not be interpreted as an imminent move by China to raise borrowing costs, as he tends to attach great importance to issues like financial risks and asset bubbles, according to Guotai Junan Securities. His opinions had little relevance to short-term adjustment in policies in the past, it added.
“China still needs to guard against risks such as the increases in bad loans and bond defaults, and the global scenario of slow growth, low inflation and interest rates will persist,” said Huang Wentao, an analyst at CSF Financial. “There’s no need for China to tighten policies too quickly.”