Hong Kong stocks approach 11-month high as traders load up on Alibaba, BYD and EV makers in post-Lunar holiday rally
- The city’s benchmark index has logged six weeks of gains on China reopening bets, its longest winning run since end-2019
- Reports suggest consumer spending in mainland China improved over the holiday season after Covid-19 curbs were dismantled
Hong Kong stocks surged to the highest level in almost 11 months as trading resumed after the Lunar New Year break. Holiday spending in mainland China signalled a rebound in consumer confidence following a wider reopening of the economy, while cooling US inflation aided risk appetite.
The Hang Seng Index jumped 2.4 per cent to 22,566.78 on the first day of trading in the Year of the Rabbit. The biggest gain in three weeks lifted the benchmrak to a level not seen March 1. The Tech Index soared 4.3 per cent. Onshore financial markets are closed for the week.
Tencent Holdings jumped 4 per cent to HK$407.60, Baidu gained 2.4 per cent to HK$134.40 and NetEase rose 2.7 per cent to HK$144.80. Carmaker BYD jumped 6 per cent to HK$240 while electric-car makers Xpeng, Li Auto and Nio rallied by 10.6 t0 12.5 per cent.
Box-office receipts during the Lunar holiday totalled 5 billion yuan (US$740 million), higher than the sales before the pandemic, the Shanghai Securities Times reported, citing online ticketing platform Dengta. Hotel and scenic spot bookings also exceeded the levels in the same period in 2019, the National Business Daily reported, citing data from Trip.com.
“A rebound in mobility and economic activities has been well under way, despite the initial shock wave of mass inflection,” Redmond Wong, a market strategist in Hong Kong at Saxo Bank, said in an email. “It helps remove some concerns about the recovery being stalled or delayed.”
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02:18
China says Covid outbreak has peaked as Lunar New Year travel rush returns in full swing
The Hang Seng Index has logged six weeks of gains, its longest winning streak since the end of 2019. The benchmark index has rallied over 14 per cent so far this year, the best start to a year in more than three decades. The city’s stock market has regained US$396 billion of capitalisation during the period.
Macau casino stocks weakened, reversing earlier gains. Sands China lost 2.2 per cent to HK$29.35 and Galaxy Entertainment retreated 0.8 per cent to HK$54.45. They earlier rose by at least 2.8 per cent to a one-year high. Macau casino stocks are overpriced, according to Citic Securities and UOB Kay Hian.
Meanwhile, China’s Covid death toll has also been decreasing after peaking on January 4, officials at the Chinese Centre for Disease Control and Prevention said on Wednesday. It recorded 896 deaths on January 23, the second day of Lunar New Year.
“We would like to see Covid infections quickly fall in China,” clearing the way for more robust economic growth, said Kristina Hooper, chief global market strategist at Invesco. Moderating US inflation and China’s reopening “will help drive markets in the Year of the Rabbit,” she added.
Asian markets were mixed, with the Nikkei 225 in Japan retreating 0.1 per cent and Kospi in South Korea gaining 1.7 per cent. The stock exchange in Australia is closed for a public holiday.