Friday, May 24, 2024

Hong Kong stocks gain 4.7% on the week in rally led by technology, banking

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Hong Kong stocks gain 4.7% on the week led by technology, banking sectors; China policy support hopes swirl

Hong Kong stocks extended gains on Friday as technology and banking shares helped the market further into bull-market territory following dovish comments by the US Federal Reserve and a mammoth share buy-back plan by tech behemoth Apple.

The Hang Seng Index rose 1.5 per cent to end the day at 18,475.92. The benchmark gained 4.7 per cent on the week and has risen 20 per cent from a January low, entering what is defined as bull-market territory. The Hang Seng Tech Index added 2.7 per cent after Apple’s board approved an additional US$110 billion in share repurchases.

Index heavyweights Tencent and Alibaba topped the turnover list. Tencent rose 1.2 per cent to HK$364.60 and Alibaba added 4.1 per cent to HK$79.20.

China’s onshore stock exchanges reopen on Monday and could post gains after top policymakers signalled further support for economic growth at the Politburo meeting on April 30.

“The April Politburo meeting statement reflected a strong commitment to stimulate growth, especially in the discussion on potential property destocking measures,” said BNP strategists in a note published on Friday. “The tone of the statement was a clear ramping up from the measured approach outlined in the National People’s Congress, a precondition for a bullish equity stance as highlighted in our second quarter 2024 global outlook.”

China’s Communist Party holds seven plenary sessions during the Central Committee’s five-year cycle, and the third plenum is widely considered to be the most important as it sets the economic direction for five to 10 years. Photo: Xinhua

Banking shares extended gains, with China Construction Bank rising 0.8 per cent and Industrial and Commercial Bank of China 1 per cent higher. Insurance stocks also rose, with AIA jumping 3.4 per cent to HK$61.35 and Ping An rising 4.1 per cent HK$39.55.

“We think [Fed chairman Jerome] Powell unequivocally managed to downplay the possibility that the next move by the Fed is that of a rate hike,” said Nomura strategist Chetan Seth. “This would come as a relief for stocks.”

Other major Asian markets were mixed. Australia’s S&P/ASX 200 rose 0.6 per cent and South Korea’s Kospi eased 0.3 per cent.

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