Goldman expects more piecemeal stimulus from Beijing to help revive market confidence, following sentiment-boosting measures in recent weeks
Hang Seng claws back some of the 8.5 per cent loss in August, with data this week pointing to a recovery in the Chinese economy
Hong Kong stocks advanced on optimism China will deliver more stimulus to revive confidence in the market after rolling out new easing measures to support the housing market. Reports later this week may show economic conditions improved last month.
The Hang Seng Index gained 2.5 per cent to 18,832.16 at 11.04am local time, touching the highest level since August 14. The Tech Index rose 2.5 per cent and the Shanghai Composite Index added 1.1 per cent.
Alibaba Group jumped 3.2 per cent to HK$93.05 and e-commerce peer JD.com climbed 3.8 per cent to HK$133.70, while Tencent Holdings added 2.5 per cent to HK$333.20. Electric-car maker BYD advanced 2.7 per cent to HK$252.40 and Geely climbed 3.3 per cent to HK$10.06 after another month of robust deliveries. NIO climbed 3.4 per cent to HK$86.60.
China unveiled a spate of measures in recent weeks to shore up the ailing economy, including a cut in stock-trading fees, while Beijing and Shanghai let first-home buyers enjoy preferential rates on mortgages. The People’s Bank of China will the cut reserve requirement ratio for foreign-currency deposits in a move to stem a slide in the local currency.
“Collectively, they send a clear signal that policymakers want to stabilise the property market, boost growth and lift sentiment,” analysts at Goldman Sachs wrote in a note on Sunday. “We suspect more piecemeal measures will continue to be introduced until policymakers are satisfied with the result.”
The Hang Seng Index strengthened 2.4 per cent in typhoon-interrupted trading last week, the best performance in a month. The benchmark slumped 8.5 per cent in August, the most since a 9.4 per cent loss in February.
China’s exports and imports in August likely contracted at a slower pace from the preceding month, according to economist forecasts tracked by Bloomberg, before a government report on September 7. Consumer prices probably increased, rebounding from a drop, a report on September 9 may show.
Major Asian markets gained. Japan’s Nikkei 225 climbed 0.3 per cent, South Korea’s Kospi added 0.1 per cent and Australia’s S&P/ASX 200 jumped 0.6 per cent.
