Hong Kong stocks snap 5-day slump as China rate-cut hopes as Alibaba, HSBC help lift market from 13-month low

Hong Kong stocks snap 5-day slump as China rate-cut hopes as Alibaba, HSBC help lift market from 13-month low

09 Jan Hong Kong stocks snap 5-day slump as China rate-cut hopes as Alibaba, HSBC help lift market from 13-month low

Posted at 02:26h in Asia by

Hong Kong stocks advanced after Beijing hinted at more policy support to shore up the nation’s faltering economic growth. Three companies started trading for the first time, with two of them suffering steep losses.

The Hang Seng Index rose 0.6 per cent to 16,313.73 at 9.45am local time, halting a cumulative 4.8 per cent decline in preceding five trading days. The Tech Index climbed 0.9 per cent from a 13-month low, while the Shanghai Composite Index was little changed.

Alibaba Group added 0.6 per cent to HK$70.75 while HSBC gained 1.4 per cent to HK$63.55 and Baidu strengthened 1.8 per cent to HK$115.00. EV maker BYD added 1.6 per cent to HK$208 and rival Li Auto rose 0.4 per cent to HK$132.10. Online travel services group Trip.com jumped 1.3 per cent to HK$293.60 and JD Health rose 1.2 per cent to HK$33.30.

The People’s Bank of China will use tools such as open market operations, medium-term lending facilities and reserve requirements to “provide strong support” for the reasonable growth of credit, state-run Xinhua News Agency reported on late Monday, citing Zou Lan, director of the monetary policy department at the central bank.

“Beijing has continued to introduce policy stimulus measures due to an increasing likelihood of another growth dip,” analysts at Nomura said in a note on Monday. The central bank “is quite likely to cut its benchmark lending rates” next week, they added.

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The Hang Seng Index has fallen 4.8 per cent this year before today, the worst start to a new year in nearly two decades, before official reports later this week that are forecast to show a slowdown in the Chinese economy. Foreign fund managers have sold a net 9.9 billion yuan (US$1.4 billion) of onshore-listed stocks so far this month, adding to a record sell-off over the preceding five months, according to Stock Connect data.

Elsewhere, three Chinese companies debuted in Hong Kong on Tuesday. Concord Healthcare, a producer of medical and healthcare devices, sank 31 per cent to HK$9.80, while Shenzhen-based building contractor Zhongshen Jianye tumbled 19 per cent to HK$0.81. Changjiu Holdings, which runs automotive dealerships, rose 2.5 per cent to HK$6.10.

The trio raised a combined gross proceeds of HK$992.3 million (US$127 million) from their stock offerings, with Concord and Changjiu pricing them at the lower end of their target range.

Other key Asian markets rallied. South Korea’s Kospi gained 0.3 per cent while Australia’s S&P/ASX 200 and Japan’s Nikkei 225 jumped 1.1 per cent.

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