Hong Kong stocks rise to one-week high on progress in talks between Russia and Ukraine

  • The Hang Seng Index gained 1.2 per cent at the break on Wednesday
  • The Hang Seng Tech Index added 0.3 per cent and China’s Shanghai Composite Index advanced 1.1 per cent

Hong Kong stocks rose to their highest level in a week on Wednesday, as progress in talks between Russia and Ukraine boosted appetite for risk assets.

The Hang Seng Index gained 1.2 per cent to 22,180.69 at the noon break and was heading for a third straight day of gains. While the Hang Seng Tech Index added 0.3 per cent, China’s Shanghai Composite Index jumped 1.1 per cent and was poised for its biggest gain in almost two weeks.

Country Garden Services, Geely Automobile Holdings and Bank of China (Hong Kong) (BOCHK) topped the list of gainers in Hong Kong, rising by more than 5 per cent. Kuaishou Technology and Bilibili slid by at least 1.8 per cent after The Wall Street Journal reported that Beijing was mulling new curbs on live-streaming businesses.

Russia said it will sharply reduce its military activity near Ukraine’s capital Kyiv and its chief negotiator said Moscow would take steps to “de-escalate” the conflict. The negotiations, however, failed to reach a ceasefire agreement and the US said Kyiv remained under threat.

Crude oil futures rebounded 0.5 per cent to trade around US$104 a barrel in Asian trading, snapping a two-day losing streak.

“This is certainly going better than many of us hoped,” said Clifford Bennett, chief economist at ACY Securities. “This was a nice add-on catalyst to the already significant upwards momentum in the equity market.”

Other Asian markets mostly rose, except Japan, taking cues from an overnight gain in US equities. Investors, however, remained wary of the so-called inversion of the yield on two-year and 10-year Treasuries, a sign that an economy will enter a recession.

Local traders were also keeping a close watch on corporate earnings, with the deadline for annual results ending on Thursday. Property developer Country Garden Holdings, Industrial and Commercial Bank of China and PetroChina are among the last batch of the members of the Hang Seng Index that are expected to release reports this week.

Fifty-six out of the 66 constituents of the benchmark have already posted annual reports and averaged a 15 per cent increase in earnings, according to Bloomberg data. The outcome trails analysts’ estimates by 0.5 per cent, the data shows.

Among the biggest gainers, Country Garden Services rallied 6.4 per cent to HK$33.30, Geely climbed 5.3 per cent to HK$12.76 and BOCHK added 5.1 per cent to HK$29.90.

Kuaishou retreated 4.8 per cent to HK$74.70 even after releasing its fourth-quarter revenue that exceeded estimates. Bilibili lost 1.8 per cent to HK$221.80. Beijing may impose daily caps on tipping, a key source of revenue for live-streaming platforms, and restrictions on other areas such as content censorship, with vice-premier Liu He making a final call on the proposals, the Journal said.

Elsewhere, China Conch Environment Protection Holdings traded at HK$12.90 on its first day of trading in Hong Kong.

Author: Zhang Shidong, SCMP

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