Hong Kong stocks climb as China moves to stem yuan weakness, pledges support for economy while HSBC slips
- Stocks rebounded from a six-week low, with tech leaders like JD.com, Alibaba and Meituan surging by more than 3 per cent
- China will lower the reserve ratio on foreign-currency deposits, unleashing US$7 billion to stem yuan’s depreciation while PBOC reaffirms support for economy
The Hang Seng Index rose 0.3 per cent to 19,934.71 at the close, halting an almost 8 per cent slump over the past five trading days. The Tech Index gained 2.9 per cent, recouping all of Monday’s slump as JD.com, Meituan and Alibaba Group surged by at least 3 per cent.
The Shanghai Composite Index dropped 1.4 per cent, reversing an earlier 0.9 per cent advance, adding to the biggest sell-off in two years on Monday. The Shenzhen Component Index sank 1.7 per cent.
Separately, the People’s Bank of China said recent gyrations in the financial markets were driven by expectations and sentiment, not fundamentals. It will ramp up prudent monetary policies to support industries and companies battered by the pandemic, it said in a statement on Tuesday.
JD.com surged 5.7 per cent to HK$212.20 and Meituan added 4.8 per cent to HK$145.30. Alibaba Group rallied 3.7 per cent to HK$84.90 while Tencent Holdings rose 2.6 per cent to HK$335.80. WH Group added 2 per cent to HK$5.47 before its quarterly earnings report.
Traders are also looking to a quarterly meeting of China’s Politburo later this week for more signs of policy support to overturn bearish sentiment on the economy, after the IMF and private economists trimmed their growth forecasts and investors dumped onshore stocks.
Hunan Airbluer Environmental Protection Technology jumped 53 per cent to 28.05 yuan on its first day of trading in Shenzhen.