Hong Kong stocks surge on bets Federal Reserve’s done with rate hikes, surprise China retail and industrial data
Hong Kong stocks rallied as cooling inflation in the US bolstered bets that interest rate increases may have peaked, while China’s positive retail and industrial figures helped to ease concerns about the health of the nation’s economy. Tencent and JD.com jumped before their earnings cards.
The Hang Seng Index surged 2.8 per cent to 17,888.41 at the local noon trading break, the best gain since March 1. The Tech Index jumped 3 per cent, while the Shanghai Composite Index rose 0.5 per cent.
Alibaba Group rallied 3.6 per cent to HK$82.05, food delivery platform Meituan advanced 2.8 per cent to HK$111.30, and search engine operator Baidu jumped 3.3 per cent to HK$107.20. Tencent jumped 3.4 per cent to HK$318.40 and e-commerce platform JD.com surged 4.8 per cent to HK$104.20 before their quarterly results, due after the close of trading.
HSBC gained 2.3 per cent to HK$59.70 and Sun Hung Kai Properties strengthened 3.8 per cent to HK$80.85, leading local banks and developers higher. A US government report on Tuesday showed inflation slowed more than expected, underpinning bets that the Federal Reserve’s aggressive rate-increase cycle is over.
Further lifting sentiment, China’s retail sales jumped 7.6 per cent last month while industrial output expanded 4.6 per cent, both growing at a faster pace from September, data from the National Bureau of Statistics showed on Wednesday.
China’s central bank injected 1.45 trillion yuan (US$200 billion) into the banking system through its midterm lending facility, indicating more accommodative policy from Beijing.
“We continue to see value in Hong Kong and China stocks, and favour cyclical recovery plays that are beaten down on valuations and possess relatively better fundamentals,” Nomura analysts including Chetan Seth said in a note on Wednesday.
Wednesday’s gains have pushed the Hang Seng Index 4 per cent higher this month. Still, the benchmark index has slumped nearly 10 per cent this year to rank as the worst performer among major global indices due to China’s uncertain economic recovery.
Asian stocks advanced. Japan’s Nikkei 225 added 2.4 per cent, while South Korea’s Kospi jumped 2.1 per cent and Australia’s S&P/ASX 200 climbed 1.3 per cent.
