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. Bubble or smart bet? Blockchain-stock frenzy in China spotlights hype and hope for investors in new technology Media reports on a meeting between US Commerce Secretary Wilbur Ross and Chinese premier Li Keqiang in Bangkok alleviated one of the biggest uncertainties – progress in trade talks – for the market, boosting sentiment, according to Chao. Financials climbed broadly in Hong Kong, with insurer AIA Group leading the advance with a 3.3 per cent gain to HK$82.15. Pharmaceuticals also outperformed. CSPC Pharmaceutical Group soared 5 per cent to HK$20.8. Analysts at Daiwa Capital Markets raised its target price for the stock by 29 per cent to HK$24.84 on Friday, citing faster and broader-than-expected innovative drug pipeline layout. Gains on the Wall Street on Friday also lifted the investor’s mood, according to Louis Wong Wai-kit, director of Phillip Securities. In big step, China to loosen curbs in its stock exchanges, expanding reforms from its young Star tech board “The negative factors are actually already reflected in the share price of those victimised sectors such as retail, hoteliers, food and catering. But for the [Hang Seng] index, companies with local exposure actually account for a rather small weighting,” said Wong. Meanwhile, China traders also cheered the latest vow to push forward market reforms, including a registration-based initial public offering system, on the Shanghai and Shenzhen boards by the securities regulator. Pharmaceuticals and aviation stocks lifted up the market, as early gains in blockchain-related technology shares pared. Stocks Blog: Beigene, Budweiser, AIA help push Hang Seng to three-month high A gauge of 250 drugmakers listed in China jumped 1 per cent, after China’s drug regulator granted conditional approval to the world’s first new Alzheimer’s drug in 20 years. China Southern Airlines led the carriers to surge by 8 per cent to close at 7.3 yuan. Investors were encouraged by the strengthening of the Chinese yuan of late and China Southern’s strong third-quarter earnings. Blockchain-related stocks weakened in afternoon trading, as investors pulled out of the highly speculative sector after a stellar morning session. A gauge tracking 168 China-listed companies involved in blockchain gave up all of its 1.8 per cent gains in the morning to trade flat.