Hong Kong stocks build longest winning run in three weeks as weaker China data to support policy easing bets

  • Stocks rise for a fourth day as weaker economic data for October likely to fuel policy easing bets in China
  • Property developers, tech stocks lead winners while Haidilao slumps on stock placement plan amid a business revamp

Hong Kong stocks rose for a fourth day, heading for the longest winning streak in three weeks, on optimism Beijing will ease regulatory curbs to shore up growth. Several key reports on the Chinese economy next week are likely to add to signs of slowdown.

The Hang Seng Index added 0.2 per cent to 25,302.94 at the local noon break on Friday, bringing the advance this week to 1.7 per cent. The Hang Seng Tech Index rallied 0.9 per cent, while China’s Shanghai Composite Index was little changed.

Among the biggest gainers on the Hang Seng Index, Meituan and Tencent Holdings climbed at least 1.7 per cent. Longfor Group advanced 0.7 per cent, while China Evergrande Group added 0.8 per cent.

Chinese developers and tech juggernauts led the city’s stocks higher this week on the back of mainland media reports that policymakers would soon loosen the funding restrictions on home builders to ease liquidity squeeze. A Reuters report added to the upbeat mood, saying that ride-hailing giant Didi Global may relaunch its app before the new year to mark an end to data-security investigation.

“The pressure on a slowdown in the economy is building up, so liquidity loosening is expected,” Essence Securities said in a report. “That will push down the borrowing costs in the fourth quarter, which will underpin the valuation of growth stocks.”

The Chinese government will report October data on retail sales, industrial production and fixed-asset investment on Monday. They probably moderated from September, according to consensus from economists tracked by Bloomberg.

The Communist Party wrapped up its four-day plenum of the decision-making Central Committee on Thursday, lauding achievements under President Xi Jinping, the party’s secretary general. The political gathering is seen as cementing Xi’s grip on power at the party prepares for its national congress in the second half next year.

Alibaba Group Holding, which owns the Post, dropped 1.4 per cent after posting the slowest growth in Singles’ Day sales in history despite raking on a record US$84.5 billion. Hotpot restaurant operator Haidilao International sank 7.4 per cent on a US$300 million stock placement plan, days after announcing a plan to shut about one-fifth of its hotpot restaurants.

Hongcheng Environmental Technology, a processor of hazardous waste in eastern Shandong province, fell 4.9 per cent on its first day of trading in Hong Kong.

Author: Zhang Shidong, SCMP

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