Hong Kong stocks halt six-day slump as HSBC, Alibaba surge, slower-than-expected inflation aids China policy-easing view

On Oct 14, 2022 31

A blast from the past as stocks trade at an 11-year low, A man walks past an electronic board displaying the Hang Seng Index in October 2011. Photo: SCMP

Stocks rally with regional markets following overnight gains in US equities as programme-buying said to kick in after a major sell-off this year
Almost all of the 73 Hang Seng Index members post big gains, paced by HSBC, Alibaba and Tencent

Hong Kong stocks jumped, halting a six-day slide, following an overnight rally in US equities, while a slower-than-expected inflation data in China aided policy-easing sentiment. Key markets in Asia logged more than 2 per cent gains.

The Hang Seng Index jumped 3.4 per cent to 16,942.17 at the local noon trading break, as technical indicators showed the 9.4 per cent sell-off in the preceding six days was excessive. That pared the gauge’s loss to 4.5 per cent for the week. The Tech Index surged 3.9 per cent, while the Shanghai Composite Index added 1.6 per cent.

All but one of the 73 Hang Seng Index members advanced. HSBC surged 6.5 per cent to HK$41.25, Alibaba Group Holding and Tencent Holdings both jumped nearly 4 per cent to HK$75.65 and HK$256, respectively. WuXi Biologics jumped 10.4 per cent to HK$52 and Country Garden Services advanced 7.6 per cent to HK$9.73.

The S&P 500 index jumped 2.6 per cent, overturning a loss stoked by a hotter-than-expected US inflation report. Traders cited technical factors for the reversal, and speculation that programme-buying kicked in after a year-long rout made valuations appealing. Inflation accelerated to 8.2 per cent last month, exceeding the consensus projection of an 8.1 per cent increase.

“Some investors are convinced core inflation will soon start trending lower,” said Edward Moya, an analyst at Oanda. “Monetary policy is quickly getting restrictive and that will undoubtedly send inflation lower. For some, that is good enough of a reason to get back into stocks.”

Separately, China said inflation quickened to 2.8 per cent in September from a year earlier versus 2.5 per cent in August. Economists had projected a 2.9 per cent rate. Meanwhile, producer prices rose 0.9 per cent versus 2.3 per cent in August. Market consensus was for a 1 per cent increase.

Hanon Advanced Technology Group, which makes analysis instruments, dropped 9.4 per cent to 9.86 yuan on its first day of trading in Beijing.

Japan’s Nikkei 225 surged 2.8 per cent, South Korea’s Kospi soared 2.5 per cent and Australia’s S&P/ASX 200 climbed 1.8 per cent.

Author: Zhang Shidong, SCMP