Meituan, Tencent lift Hong Kong stocks from two-month low, stopping a four-day slide

Hang Seng Index closes 1 per cent higher, ending a 7.1 per cent slide over the past four trading sessions

Consumer inflation in China showed prices rose 2.1 per cent in May from 1.5 per cent a month earlier

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A woman walks past Exchange Square which houses the Hong Kong stock exchange. Photo: AFP

Published: 10:39am, 11 May 2022Updated: 4:32pm, 11 May 2022

Hong Kong stocks rose from a two-month low as higher-than-expected inflation in April strengthened calls for further policy support to soothe the economic strain caused by strict lockdown measures on the mainland. Falling coronavirus cases in Shanghai also boosted sentiment.

The Hang Seng Index gained 1 per cent to 19,824.57 at the close of Wednesday trading, ending a 7.1 per cent slide over the past four trading sessions. The Tech Index added 2.9 per cent, its strongest gain in a week, while the Shanghai Composite Index rose 0.8 per cent.

Meituan soared 6.3 per cent to HK$161.40, while Tencent Holdings strengthened 2.7 per cent to HK$350.40. NetEase added 2.8 per cent to HK$142.50 while BYD and Geely gained at least 6 per cent.

“Valuations of Hong Kong stocks are pretty low, [attracting] some long-term funds to come in,” said Linus Yip, chief strategist at First Shanghai Securities. “Good flow through the Stock Connect in the past two days has also given support to Hong Kong markets.”

Factory-gate prices in mainland China rose by 8 per cent last month, faster than a projected 7.7 per cent by analysts in a Bloomberg survey. Producer prices had increased 8.3 per cent in March. The statistics bureau’s consumer inflation data on Wednesday showed that prices accelerated to 2.1 per cent from 1.5 per cent, exceeding analysts’ estimates.

“The moderating producer prices and benign consumer price inflation open a wider path for the People’s Bank of China to ease,” said Eric Zhu, an economist covering China and Hong Kong at Bloomberg Economics.