Hong Kong, mainland stocks extend rally as CICC predicts China to ease fiscal tightening soon
- China may start easing fiscal tightening over the next two months following sequential slowdown in growth last quarter, CICC says in report
- Hotpot chain Haidilao led gainers as Morgan Stanley upgraded stock with HK$55 price target
The Hang Seng Index rose for a second day, adding 0.9 per cent to approach a one-month high of 29,166.01. The Shanghai Composite gained 0.3 per cent to 3,593.36, after reaching a three-month high on Tuesday.
Chinese hotpot chain Haidilao led gainers among blue chip stocks, rising 4.8 per cent to HK$48 after Morgan Stanley analysts upgraded the stock to “overweight” with a price target of HK$55, according to Bloomberg data.
The extent of fiscal tightening may ease in China over the next two months, after slower sequential growth in the first quarter, analysts at China’s biggest investment bank CICC, said in a report on Tuesday. The view was based on fiscal surplus in the first four months, and potentially smaller deficit than budgeted for the rest of 2021.
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Alibaba Health retraced 5.7 per cent to HK$20.60, reaching its lowest level since December 28. Its earnings turnaround in the year to March 31 trailed analysts estimates compiled by S&P Capital IQ.
Stocks in mainland China climbed as brokerages rallied amid record foreign purchases. China Industrial Securities soared by the maximum 10 per cent while Tianfeng Securities rose 4.9 per cent. Liquor distiller Kweichow Moutai rose 1.2 per cent to 2220 yuan.
Two companies debuted on mainland bourses. Guangdong Kitech New Material Holding, which manufactures modified polypropylene products, gained 223 per cent while logistics service provider Bondex Supply Chain Management appreciated 44 per cent.