Hong Kong stocks head for highest close in more than a week as Beijing raises stimulus policy hopes

  • Stocks head for the highest close since September 2 after Premier Li Keqiang pledges to boost consumption and investment
  • A central bank credit report helped fuel buying sentiment as aggregate finance surpassed expectations, signalling demand for loans is on the mend

Hong Kong stocks rose, driving the benchmark to a more than one-week high on the prospect that Beijing will double down on measures to arrest a slowdown in economic growth after tourism revenue slumped during the Mid-Autumn Festival.

The Hang Seng Index rose 0.4 per cent to 19,441.45 at the noon break on Tuesday, heading for the highest close since September 2. The Hang Seng Tech Index added 0.5 per cent, while the Shanghai Composite Index gained 0.3 per cent.

The Hong Kong and the mainland markets were closed on Monday for the Mid-Autumn Festival holiday, when the MSCI Asia-Pacific Index rose 0.8 per cent.

Among the benchmark’s top gainers, pork processor WH Group surged 5.4 per cent to HK$5.48 and computer maker Lenovo Group rallied 5.1 per cent to HK$6.41. Alibaba Group Holding added 2.4 per cent to HK$91.95 and HSBC climbed 1.8 per cent to HK$48.90.

Limiting the gain on the broader market, Wuxi Biologics tumbled 18 per cent to HK$54.40 after the Biden administration endorsed an executive order to bolster domestic biomanufacturing and reduce US reliance on China for new drugs.

Premier Li Keqiang pledged to boost consumption as a major driver for reviving growth and to further increase investment to bolster demand and shore up confidence, according to a report published on Monday by the official Xinhua News Agency.

Li’s comments came amid disappointing data on tourism and consumption during the Mid-Autumn Festival, which was dogged by pandemic outbreaks. Tourism revenue dropped 23 per cent from a year earlier to 28.7 billion yuan (US$4.1 billion), while the number of trips slid 17 per cent to 73.4 million, according to the government data.

A central bank credit report also fuelled buying interest. Aggregate finance totalled 2.43 trillion yuan last month, the People’s Bank of China reported after the market closed on Friday. That beat the estimate of 2.08 trillion yuan by economists tracked by Bloomberg, signalling recovering demand for loans.

China’s independent monetary policy “will give more liquidity support to Hong Kong stocks,” said Wang Xueheng, an analyst at Guosen Securities. “We stick to the view that there’s limited downside room for Hong Kong stocks and there’s a big potential for upside room.”

China Tourism Group Duty Free, the nation’s biggest operator of duty-free shops, added 0.5 per cent to HK$176.90, while its Shanghai-traded stock rose 1 per cent to 192.92 yuan. Trip.com rallied 4.1 per cent to HK$209.60.

Two companies that started trading on the mainland’s exchanges both rose on Tuesday. Optical module maker Linktel Technologies rallied 31 per cent to 53.01 yuan in Shenzhen, while semiconductor maker Hi-Trend Technology advanced 9.2 per cent to 125.60 yuan in Shanghai.

Other major markets in Asia all rose before the release of a US inflation report that is expected to show that rises in consumer prices cooled in August. South Korea’s Kospi index jumped more than 2 per cent as the best performer in the region, while Japan’s Nikkei 225 rose 0.2 per cent and Australia’s benchmark gained 0.6 per cent.

Author: Zhang Shidong, SCMP

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