Hong Kong stocks began the week with a surge, continuing their three-week rally to reach a 32-month high as Citi and Goldman Sachs joined the frenzy to invest in Chinese stocks and hopes for further stimulus measures remain on the horizon.
The Hang Seng Index soared 1.6%, or 362.91 points, to close Monday's trade at 23,099.78. The Hang Seng China Enterprises Index soared to its highest since February 2022, adding 21.4%, or 174.35 points, to 8,330.85.
Investor sentiment saw a boost as Citigroup and Goldman Sachs joined the growing group of Wall Street's China optimists, raising their forecasts for major Chinese indices following China's stimulus measures, according to a South China Morning Post or SCMP report.
The stimulus-induced rally is expected to gain further momentum after the National Development and Reform Commission holds a press conference on Tuesday to discuss a policy package and its implementation to boost economic growth.
Beijing is expected to introduce additional economic stimulus, as well as a potential 3 trillion yuan consumption support package, Citigroup's Pierre Lau predicted and SCMP reported.
The lender has boosted its target for the Hang Seng Index to reach 26,000 by the middle of 2025, up 24% from its previous target, the SCMP said.
Goldman Sachs has also raised its outlook on Chinese stocks to overweight amid the recent strong policy measures.
Among the highest gainers, Semiconductor Manufacturing International's shares (HKG:0981, SHA:688981) surged 22% during the rally on Monday, with casino operator Sands China (HKG:1928) closing 10% higher.
In corporate news, Lai Sun Development's stocks (HKG:0488) ballooned 23% at Monday's close amid a sell-out of the property developer's units at its new residential project, The Parkland, in the New Territories.
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