Hong Kong stocks climb to three-month high as traders see little downside for a dirt-cheap market
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Hong Kong stocks soared to their highest level in over three months on Monday, while China markets also climbed, as investors piled in on signs of US-China trade deal progress and the mainland regulator’s vow to reform the A-share market.
The Hang Seng Index soared by 1.7 per cent to 27,547.3 per cent, closing at the highest level since August 1. In China, the Shanghai Composite Index gained 0.6 per cent to close at 2,975.49, a one-week high, while the Shenzhen Component Index climbed 0.7 per cent.
The Hong Kong market has been roiling in the aftermath of ongoing anti-government protests, which have pushed the city’s economy into a technical recession. The Hang Seng benchmark plunged by 12 per cent between a recent high on July 2 and a low on August 13.
“The Hang Seng Index has been teasing historically low multiples – I think much of the bad news had been priced into the market, including the ongoing protests and weak economic data for the prior quarter,” David Chao, global market strategist for Asia Pacific at Invesco, wrote in an emailed note.
“I don’t see the Hang Seng Index going much lower than these levels,” he wrote.