Alibaba, BYD lead Hong Kong stock gains as Yellen heads to Beijing in boost for US-China ties while Xpeng surges
- Treasury Secretary Yellen to make a four-day trip to China from Thursday, after Secretary of State Blinken met top officials in Beijing last month
- Alibaba Group, BYD, JD.com lead winners on hopes geopolitical and tech tensions to ease on visits
Hong Kong stocks rose by the most in two weeks on expectations efforts to improve US-China relations will help ease geopolitical tensions and tech rivalry, boosting the appeal of local assets.
The Hang Seng Index jumped 2.1 per cent to 19,361.59 at the close of Monday’s trading, the biggest advance since June 15, adding to a 3.7 per cent rebound in June. The Tech Index soared 3.7 per cent, while the Shanghai Composite Index gained 1.3 per cent.
Alibaba Group surged 2.9 per cent to HK$83.55, while JD.com increased 4.5 per cent to HK$138.30 and Baidu rallied 4.6 per cent to HK$138.90. China’s EV makers surged on a bullish outlook after sales jumped in June. Xpeng jumped 16.5 per cent to HK$58.25, while BYD climbed 4.5 per cent to HK$261.20.
China’s finance ministry said US Treasury Secretary Janet Yellen will make a four-day visit starting from Thursday to discuss financial and economic affairs that are important to both countries. The trip will be the second top-level meeting after Secretary of State Antony Blinken met top officials including President Xi Jinping in Beijing last month.
Yellen will discuss “the importance for our countries – as the world’s two largest economies – to responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges,” her department said in a statement.
While the Hang Seng rallied in June, the city’s benchmark only succeeded in trimming the losses last quarter to 7.1 per cent, making it the worst three months since Beijing’s zero-Covid pivot last year.
Meanwhile, China’s central bank said on Friday it would step up programmes to support small businesses, and signalled attempts to slow the currency slump. The yuan traded near an eight-month low of 7.25 per US dollar, having depreciated more than 2 per cent this year, according to Bloomberg data. Only the Japanese yen, which slumped 3.2 per cent, has suffered more among major Asian currencies.
02:49
‘China will not challenge or replace the US’, Xi tells Blinken at crucial meeting
The People’s Bank of China appointed Pan Gongsheng, the former head of the State Administration of Foreign Exchange, as the “party secretary” of the central bank from July 1, putting him in line to succeed Yi Gang.
A private sector report today showed China’s factory activity stabilised at a lower level in June. The Caixin/S&P Global PMI manufacturing index dropped to 50.5 from 50.9 in May. A reading above 50 indicates expansion, with weaker new order and export order sub-indices.
Elsewhere, one stock started trading on Monday. Renxin New Material fell 8.2 per cent to 24.49 yuan in Shenzhen.
Key Asian markets traded higher. The Nikkei 225 in Japan increased 1.7 per cent, while the Kospi in South Korea gained 1.5 er cent and the S&P/ASX 200 in Australia advanced 0.6 per cent.