CNOOC, Chinese banks power Hong Kong stock rebound before earnings season as confidence recovers

Xi Jinping opened the Communist Party’s congress on Sunday touting its zero-Covid policy and warned of ‘dangerous storms’ amid challenges from the US

CNOOC advanced after saying earnings for the nine months to September likely doubled on the back of higher oil prices

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A public screen displays the state of mainland China and Hong Kong stock markets on October 10. Photo: Bloomberg

Published: 10:41am, 17 Oct 2022Updated: 5:17pm, 17 Oct 2022

Hong Kong stocks erased losses after a rally in CNOOC fanned by a surge in corporate earnings as the new quarterly reporting season kicked in, while Chinese state-controlled lenders gained amid vows to support the economy.

The Hang Seng Index rose 0.2 per cent to 16,612.90 at the closing of Monday trading, after sliding as much as 1.7 per cent. The Tech index retreated 0.2 per cent, trimming a more than 3 per cent slump. The Shanghai composite index advanced 0.4 per cent to overturn a 0.6 per cent setback.

CNOOC surged 1.9 per cent to HK$9.84 after signalling a more than doubling in earnings in its impending nine- month results, citing gains from higher crude oil prices. Hansoh Pharma surged 13.2 per cent to HK$13.20.

Bank of China and Industrial & Commercial Bank of China rose by more than 1.6 per cent, while the Construction Bank climbed 0.3 per cent. The nation’s top lenders pledged to support the real economy, the Securities Times reported, after writing more new loans in September to underpin a stronger-than-expected jump in credit impulse.

Market confidence is now “neutral to contrarianly positive” with a better monetary environment, Hong Hao, market strategist and chief economist at Grow Investment Group, said in a research note on Sunday.

Major tech stocks slumped in the opening trading hours after Chinese President Xi Jinping doubled down on stringent Covid0-19 control on Sunday at the 20th National Congress, and also warned of “dangerous storms” ahead while it fosters new economic growth engines.

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