Hong Kong stocks extend winning run as bulls build optimism on Xi-Biden summit, policy easing bets
- Hang Seng has risen 3.6 per cent over six days going into the Xi-Biden virtual summit
- Elsewhere, policy easing bets are growing as Chinese provincial authorities are beginning to loosen property curbs to spur home sales
Hong Kong stocks rose for a sixth day, the longest winning run in nine months, as China and US leaders began a virtual summit aimed at easing tensions between the world’s two largest economies.
The Hang Seng Index advanced 1.1 per cent to 25,658.04 at the noon break on Tuesday trading. The six-day gain totalling 3.6 per cent is the longest since February 17. The Hang Seng Tech Index added 1.2 per cent, while China’s Shanghai Composite Index rose 0.3 per cent.
Macau casino operators Sands China and Galaxy Entertainment were the biggest index gainers in the city, each rising by at least7 per cent, before an annual policy address by the city’s chief executive Ho Iat Seng in the afternoon that may bolster the industry. Xinyi Glass was the worst performer with a 4.3 per cent loss.
Traders are monitoring the meeting between President Xi Jinping and Joe Biden on Tuesday morning. In his opening remarks, Xi said the two countries should seek peaceful coexistence and mutually beneficial cooperation, handle their own affairs well and share global responsibility. Biden is expected to press Xi on issues from human rights to trade practices such as state subsidies, officials said.
Signs of any improvement in the bilateral ties could remove a geopolitical overhang in the market since the began in 2018 under the Trump administration.
Investors are “awaiting some positive spin to come out of the virtual summit,” said Edward Moya, an analyst at Oanda. “If Biden wants a win, he could ease some of the Trump tariffs.”
Sentiment on Hong Kong and Chinese has also improved over the past week on optimism Chinese policymakers will ease regulatory curbs, especially in the liquidity-stressed property sector to revive growth. Authorities in several mainland provinces appear to have relaxed rules to spur home sales after prices fell by the most in six years last month.
Three companies debuted in mainland China. Suzhou Wanxiang Technology, a maker of consumer electronic components, jumped 211 per cent in Shenzhen. Jiangsu Cai Qin Technology, a telecommunication equipment maker, surged 89 per cent in Shanghai and auto-parts maker Zhejiang Liming Intelligent Manufacturing rallied 44 per cent.
Other major markets in Asia-Pacific were mixed, with benchmarks in Japan and South Korea rising and that in Australia retreating. US stocks slipped overnight amid a wild swing of Tesla and a surge in government bond yields.
Author: Zhang Shidong, SCMP