Bargain hunters lift Hong Kong stocks off 10-month lows as China data cheers
Hong Kong’s major stock index rebounded from a 10-month trough after government data showed industrial profit for Chinese companies reversed declines for the first time this year with bargain-hunting trades providing an additional boost.
The Hang Seng Index rose 0.8 per cent to 17,598.35 as of 11.24am local time, after closing a day earlier at its lowest since November 28. The Hang Seng Tech Index advanced by 0.8 per cent while the Shanghai Composite Index added 0.3 per cent.
Alibaba Group Holding climbed 1.4 per cent to HK$85.05 after its delivery unit Cainiao Smart Logistics Network applied for an initial public offering in Hong Kong. The Hangzhou-based logistics company is aiming to raise at least US$1 billion, according to people familiar with the matter, which would make it the world’s second-largest stock offering this year.
Hansoh Pharmaceutical Group rallied 4.5 per cent to HK$10.80 and Wuxi Biologics gained 4.7 per cent to HK$44.95. China Overseas Land and Investment added 1.9 per cent to HK$15.92 and JD.com rose 1.7 per cent to HK$114.10.
“We expect the economic data recovery to continue in the next few months with all the government supportive measures starting to show effects,” said Chris Liu, a portfolio manager at Invesco. “However, there are still some structural problems that need to be resolved such as the local government debt issues.”
Industrial profits for Chinese firms rose 17.2 per cent from a year earlier in August, the first increase this year, according to the National Bureau of Statistics. The data lifted hopes the world’s second largest economy may have reversed its recent downtrend.
Trading shrinks as US$955 billion slump in China stocks frightens contrarians
Trading shrinks as US$955 billion slump in China stocks frightens contrarians
Still, caution prevails ahead of the weeklong Mid-autumn and National Day holidays that begin on Friday. Mainland China’s stock markets in Shanghai and Shenzhen will halt trading on Friday and the whole of next week, pushing traders to lighten their stock positions and minimise the risk of being unable to transact during the holiday.
The Hang Seng Index has lost about 7 per cent this quarter, heading for a second straight quarterly loss, as troubled developer China Evergrande Group’s woes intensified with the stimulus provided by policymakers falling short of expectations.
Elsewhere, Chinese developer CIFI Holdings Group tumbled 53 per cent to HK$0.355 as the stock resumed trading after releasing an overdue interim report. Trading in its shares had been suspended since March 30.
The markets of Shanghai, Shenzhen and Hong Kong gained while other major Asian markets fell. Japan’s Nikkei 225 slipped 0.7 per cent, while South Korea’s Kospi and Australia’s S&P/ASX 200 both lost 0.2 per cent.
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