Hong Kong stocks advance on easier border rules, Xiaomi gains on ‘BIG NEWS’ and markets assess Archegos fund blow-up

Xiaomi gained as smartphone maker unveiled new line-up of 5G phones alluded in its ‘BIG NEWS’ teaser last week

Chinese textile and apparel producers profited from a boycott of foreign brands amid a controversy surrounding cotton produced in Xinjiang

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888 7th Ave, a New York building that reportedly houses Archegos Capital Management. Photo: Reuters

Published: 10:47am, 30 Mar 2021Updated: 5:06pm, 30 Mar 2021

Hong Kong stocks gained for a third day as traders retained focus on global recovery prospects and the fallout from the implosion of New York investment Archegos Capital Management appears to have subsided for now.

The Hang Seng Index added 0.8 per cent to 28,577.50 at the close on Tuesday, with Chinese textile and apparel producer Shenzhou International topping the gainers. The Shanghai Composite Index climbed 0.6 per cent.

China’s one-year sovereign bonds rose after FTSE Russell said it would proceed with its plan to include the nation’s government debts to its global bond index in phases from October, marking a further step in opening up the Asian nation’s US$16 trillion domestic bond market.

Investors kept their focus on the outlook of the global recovery outlook. Hong Kong on late Monday eased restrictions and quarantine requirements for global travellers in a move to reopen its borders. President Joe Biden is expected to unveil an additional stimulus package later this week, which will tilt towards infrastructure projects.

“As the contagion risk of the forced liquidation behind block sales in single name stocks lessens, investors feel less distracted” about the Archegos blow-up, said Stephen Innes, a strategist at AxiCorp. Biden’s infrastructure stimulus “could provide a smoother and lengthier runway for risk to initially take flight,” he added.

Market sentiment was also lifted by some good news on the vaccine front. Biden said that 90 per cent of the adults will be eligible for vaccination next month and a study from Pfizer and Moderna showed their doses effectively prevented coronavirus infections.

People walk past an Adidas sportswear store in Hong Kong, Saturday, March 27, 2021. Chinese textile and apparel makers are profiting from Chinese boycott of foreign brands. Photo: AP

Other equity markets in Asia were mixed on Tuesday. The Topix index in Japan declined as much as 1.3 per cent, mainly dragged down by Nomura after the nation’s biggest brokerage warned of losses worth about US$2 billion tied to margin calls at an unnamed US fund, which media reports later identified as Archegos.