Hong Kong and China markets rise, boosted by record quarterly growth in China GDP
- Hang Seng Index gains 0.6 per cent for a weekly gain of 0.9 per cent
- China’s economy grew 18.3 per cent in the first quarter of 2021: National Bureau of Statistics
The Hong Kong and China markets gained on Friday, as record growth in China’s gross domestic product (GDP) in the first quarter gave investor sentiment a lift even if it was slightly below expectations.
In Hong Kong, the Hang Seng Index gained 0.6 per cent to 28,969.71, after falling by as much as 0.3 per cent earlier. It ended the week with gains of 0.9 per cent.
Alongside the positive momentum in economic data, many Chinese companies were also reporting very strong earnings growth in the first quarter, said Chaoping Zhu, global market strategist at JP Morgan Asset Management.
However, the prospect of a subdued stimulus might put a cap on further valuation upside in the equity markets, he said. “Under such circumstances, it is very important for investors to focus on quality and long-term growth potential. As China’s economic growth stays on track, we remain constructive about sector leaders in technology, consumption and financial services.”
Elsewhere, a third batch of eleven big Chinese technology companies, including Alibaba Group Holding and Tencent Holdings-backed China Literature, have pledged to comply with the country’s antitrust law after 34 firms were summoned by regulators on Tuesday for a meeting.
The Hang Seng Tech Index rose 1.1 per cent to 8,232.13, although it has retreated 0.9 per cent for the week for its second consecutive week of declines, as concerns about heightened government regulation continue to weigh on the sector.
Tencent added 1.9 per cent to HK$632. China Literature rose 3.9 per cent to HK$79.15, after declining by as much as 1.5 per cent. Baidu fell 1.6 per cent to HK$207.
On the mainland, the Shanghai Composite Index added 0.8 per cent, although it recorded a decline of 0.7 per cent for the week. The CSI 300 index of the biggest stocks in Shanghai and Shenzhen added 0.4 per cent, although it has declined 1.4 per cent for the week.
Liquor distiller Kweichow Moutai rose 2 per cent to 2,054.98 yuan, while Ping An Insurance slipped 0.2 per cent to 75.70 yuan. In Shanghai, Longyan Kaolin Clay rose 44 per cent to 18.52 yuan from its listing price of 12.86 yuan.
Overnight on Wall Street, the S&P 500 and Dow Jones indices hit record highs on a strong rebound in March retail sales, as well as upbeat earnings reports from companies such as banking giants JPMorgan Chase and Bank of America.
