Alibaba, Geely lift Hong Kong stocks on China stimulus bets as Xi pledges to achieve 5.5 per cent growth target
- Xi pledges to achieve the national growth target of 5.5 per cent despite doubts among economists, investment banks after losses induced by Covid-19 lockdowns
- Geely Auto, NetEase and Alibaba log big gains as traders count on policy support to drive corporate earnings
Hong Kong stocks rose as traders bet China will step up economic stimulus to shore up growth and business confidence after President Xi Jinping pledged to meet the annual growth target this year.
The Hang Seng Index gained 0.7 per cent to 21,154.77 as of 10.45am local time on Thursday. The Hang Seng Tech Index added 1.2 per cent, while the Shanghai Composite Index advanced 0.4 per cent.
Geely Automobile surged 6.4 per cent to HK$16.68 while NetEase jumped 2.7 per cent to HK$142.90. Alibaba Group Holding added 3.4 per cent to HK$104.90.
China will strive to meet the growth target for 2022 by adjusting its macro policy and implementing more effective measures, Xi said in a virtual keynote speech at a business forum on Wednesday. The economy expanded 4.8 per cent in the first quarter, and likely slowed to 2.6 per cent this quarter. China targets about 5.5 per cent growth in 2022.
The statement fuelled optimism policymakers will deliver more actions to revive activity and repair business and consumer confidence following losses inflicted by lockdowns in Shanghai and 40-odd mainland cities earlier this year.
Citigroup predicts the Hang Seng Index will climb as much as 16 per cent in the second half as policy stimulus aids corporate earnings rebound while progress on more effective vaccines temper lockdown risks.
Other major markets in Asia-Pacific were mixed. Federal Reserve chairman Jerome Powell acknowledged the risk of a recession in a testimony to lawmakers and said it would be very challenging to engineer a soft landing of the economy.
Author: Zhang Shidong, SCMP