Hong Kong stocks log biggest gain in 3 months as Tencent, Alibaba, Longfor surge on stimulus bets while BYD gains on record EV sales
- All but three of 76 Hang Seng Index members gained in Friday’s rally as market moved further away from bear territory
- Goldman lowered targets on Chinese stocks; Beijing should consider a targeted stimulus to revive property sales, consumer spending, US investment bank says
The Hang Seng Index soared 4 per cent to 18,949.94 at the close of Friday trading, the most since March 1, with all but three of its 76 members posting gains. The Tech Index strengthened 5.3 per cent, also the most in about three months. The Shanghai Composite Index added 0.8 per cent.
The city’s main index closed the week out with a 1 per cent gain, ending a three-week losing streak, while the Tech Index halted an eight-week slump.
Tencent jumped 6 per cent to HK$334.20 to lead the rally while Alibaba Group surged 6.7 per cent to HK$82.50 and Baidu gained 7.3 per cent to HK$130.50. Developer Longfor soared 17.2 per cent to HK$17. BYD added 4.5 per cent to HK$245 after electric-vehicle sales doubled in May. Peers Nio, Li Auto and Xpeng rose by 3.8 to 7.9 per cent.
“The market is now betting on policy easing” as China’s post-Covid recovery continues to lose steam, Zhang Chen, an analyst at Northeast Securities said in a note to clients. The Politburo meeting in July might change the policy tone in favour of the market, he added.
Today’s advance lifted the benchmark index further away from bear-market territory. The barometer slipped earlier this week, taking the drop beyond 20 per cent from its January 27 peak into a technical bear market, as China’s economic recovery faltered amid a manufacturing slump.