Hong Kong stocks leap in catch-up trade after China’s manufacturing rebound; Xiaomi surges on strong EV orders

China’s PMI manufacturing index rose to 50.8 in March from 49.1 in February, above market consensus estimates, ending five months of contraction in factory activity

Chinese smartphone and gadget maker Xiaomi reported solid orders after its foray into the world’s biggest electric vehicles market

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Lei Jun, founder and CEO of Xiaomi, introduces new energy vehicle model SU7 at a launch event in Beijing, capital of China, March 28, 2024. Photo: Xinhua

Published: 10:43am, 2 Apr 2024Updated: 4:47pm, 2 Apr 2024

Hong Kong stocks jumped by the most in three weeks as trading resumed after a 4-day break, with investor sentiment lifted by a manufacturing rebound in the world’s second biggest economy and as Chinese smartphone and gadget maker Xiaomi reported solid orders on its debut in the world’s biggest electric vehicles (EV) market.

The Hang Seng Index advanced 2.4 per cent to 16,931.52 at the closing of Tuesday trading, its highest level since March 13. The Tech Index strengthened 1.9 per cent but the Shanghai Composite Index declined 0.1 per cent, surrendering earlier gains.

Smartphone maker Xiaomi surged 9 per cent to HK$16.28, the highest level since December 27, after reporting last Thursday its first EV model received strong orders.

Online travel agency Trip.com gained 9.2 per cent to HK$377, a record high, after analysts at Citigroup bumped up the price target on the improving travel outlook. Bank of China (Hong Kong) rallied 9.6 per cent to HK$22.95 and Hang Seng Bank advanced 5.3 per cent to HK$90.15, leading gains among lenders.

China’s official PMI manufacturing index rose to 50.8 in March from 49.1 in February, the statistics bureau said on Sunday. The reading surpassed market consensus of 50.1 and ended five months of contraction in factory activity. A separate report by Caixin/S&P Global on Monday showed the manufacturing index rose to 51.1 in March, beating analysts’ forecasts.

“Looking ahead to the second and third quarters, there are numerous positive developments taking place in China,” Wang Jingjing, analyst at independent research firm Horizon Insights said in a note. Hong Kong stocks, especially internet companies with solid earnings, could benefit most if foreign funds look to add China exposure, they added.