Hong Kong stocks climbed for a fourth day as investors bet Beijing will deliver on its pledge to shore up the ailing property sector and consumer confidence. Gains were limited as manufacturing in China shrank and before HSBC releases its latest earnings report.
The Hang Seng Index rose 0.1 per cent to 20,105.63 at 11am local time, adding to a two-month rally. The Tech Index jumped 0.8 per cent, while the Shanghai Composite Index declined 0.1 per cent.
Alibaba Group jumped 1.9 per cent to HK$99.35, Tencent appreciated 0.6 per cent to HK$356.40 and NetEase gained 2.9 per cent to HK$174.40. Meituan strengthened 1 per cent to HK$147.70, while travel agency Trip.com surged 2.6 per cent to HK$319.60.
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HSBC was little changed at HK$65.25, and its subsidiary Hang Seng Bank retreated 0.8 per cent to HK$117.80. Mainland property developers like Country Garden and Longfor slid by 1 to 5.1 per cent, paring steep gains from Monday.
China is ready to step up efforts to stimulate private investment, strengthen capital markets and lift confidence among investors, Premier Li Qiang said after chairing a State Council executive meeting on Monday, according to a report published by state-run Xinhua News Agency.
First-tier mainland Chinese cities including Beijing and Shenzhen have pledged to introduce more supportive policies to aid the property market. Meanwhile, Beijing is also seeking to boost consumption to spur recovery, particularly with incentives for electric-car purchases.
View on China too negative as Beijing corrects policy course, US fund says
“We still see limited downside risks for China equities, amid China’s ongoing post-Covid recovery and a gradual return in foreign capital, while the shift in economic policy tone at the latest Politburo meeting signals the policy bottom for the China stock market,” Patrick Pan, a strategist at Daiwa Capital Markets wrote in a note to clients.
The Hang Seng Index gained 5 per cent in July and 5.7 per cent in June, the first back-to-back advance since January. Foreign investors were net buyers of 47 billion yuan (US$6.6 billion) worth of mainland stocks last month, taking the net inflow this year to US$32 billion, Stock Connect data showed.
At the same time, mainland Chinese funds bought HK$15.8 billion (US$2 billion) of stocks listed in Hong Kong in July.
Gains were limited as HSBC and its subsidiary Hang Seng Bank slipped before publishing their second-quarter report cards to shareholders later today. HSBC’s adjusted net income probably shrank 3 per cent to US$6.1 billion last quarter, according to analysts tracked by Bloomberg.
Elsewhere, the Caixin/S&P Global China manufacturing index fell to 49.2 in July from 50.5 in June. A government report earlier this week showed Chinese manufacturing stabilised below 50 last month. A reading below 50 indicates contraction in activity.
Two stocks debuted on Tuesday. Harbin Fuerjia Technology jumped 27.8 per cent to 71.20 yuan in Shenzhen, while Zhejiang Rongtai Electric Material surged 128 per cent to 34.94 yuan in Shanghai.
Most major Asian markets traded higher. Japan’s Nikkei 225 gained 0.7 per cent, Australia’s S&P/ASX 200 added 0.4 per cent. South Korea’s Kospi jumped 1.2 per cent.
More from South China Morning Post:
- Consensus on China too negative as stock bulls embrace Beijing ‘course correction’, US fund strategist and ex-diplomat says
- History leaves China stock bulls vulnerable in third quarter as Biden executive order, broken property market challenge optimism
- Beijing, Shenzhen and Guangzhou officials vow support for China’s struggling property market, stocks surge
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