Hong Kong stocks climb on China easing bets, receding Ukraine tension while traders sidestep record Covid-19 infections in city

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Uploaded: 2022-02-16T02:46:45.000Z
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Producer prices and consumer inflation in mainland China cooled in January by more than economists expected, boosting chances for more easing measures

Hang Seng Index snapped a three-day slide as Alibaba and Sands China led the charge; PetroChina lost ground as oil tumbles

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Investors monitor stock prices at a brokerage house in Beijing in October 2019. Photo: AP

Zhang Shidong

Published: 10:46am, 16 Feb 2022Updated: 5:30pm, 16 Feb 2022

Hong Kong stocks gained as slower inflation in China strengthened bets for more policy easing measures while military tensions between Russia and Ukraine eased. Traders shrugged off a record number of new infections even as the fifth wave of the pandemic rattled the city.

The Hang Seng Index jumped 1.5 per cent to 24,718.90 at the close of Wednesday trading, halting a 2.3 per cent slide over the past three days. The Tech Index advanced 2.3 per cent while the Shanghai Composite Index added 0.6 per cent.

BOC Hong Kong, Ping An Insurance and casino operator Sands China topped gainers, climbing more than 3 per cent. Alibaba Group Holding added 3.5 per cent before its earnings report next week. PetroChina slipped 0.2 per cent as crude oil tumbled.

Factory-gate prices in mainland China rose by 9.1 per cent last month, moderating from a 10.3 per cent gain in December, the statistics bureau said on Wednesday, while consumer inflation slowed to 0.9 per cent from 1.5 per cent. Both trailed analysts’ estimates, leaving more room for policymakers to stimulate the economy.

While the pandemic and energy prices remain uncertain, “inflation hasn’t constituted a constraint on the manoeuvre for policies,” said Bruce Pang, head of research and macro strategy at China Renaissance in Hong Kong.

China this week injected 100 billion yuan (US$15.7 billion) of liquidity into its financial system to support businesses, adding to recent steps in the past two months to lower borrowing costs and ease funding strain in the property sector.

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US troops deployed to eastern Europe to support Nato amid Ukraine-Russia crisis

A resurgence in Covid-19 in the city failed to dampen buying sentiment. Hong Kong reported a record 4,285 new cases on Wednesday, alongside with 7,000 more preliminary-positive infections identified so far, according to officials.