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Hong Kong stocks rocket to extend surge
The Hang Seng Index jumped 5.79 percent, or 1,163.47 points, to 21,250.97 by the break.
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People wear protective masks as they walk past a panel displaying the Hang Seng Index during morning trading following the outbreak of the new coronavirus in Hong Kong, China March 2, 2020. REUTERS/Tyrone Siu (REUTERS/Tyrone Siu)
H
ong Kong stocks soared Thursday, extending the previous day's nine percent gain, as investors pile back in after China's pledge to support markets.
The Hang Seng Index jumped 5.79 percent, or 1,163.47 points, to 21,250.97 by the break.
The Shanghai Composite Index rose 2.59 percent, or 82.25 points, to 3,252.96, while the Shenzhen Composite Index on China's second exchange added 3.56 percent, or 74.25 points, to 2,160.50.
Investor sentiment was sent rocketing Wednesday after Chinese authorities said they would maintain capital market stability and adopt measures to handle risks for troubled property developers.
The announcement was music to the ears of investors in Chinese tech firms, which have been reeling for more than a year owing to a government crackdown on the sector compounded by recent fears about possible US sanctions if Beijing were to help Russia in its war with Ukraine.
The Hang Seng Tech Index soared more than 10 percent Thursday, having seen a record advance of more than 20 percent the day before.
And market heavyweights in the tech sector also built on their blistering gains, with Alibaba, Tencent, JD.com, XD Inc and Meituan up between seven and 15 percent.
"In the short term, it's fund flow and liquidity that's driving up the whole market, on the back of such a cheap valuation level," said Kenny Wen, at Everbright Sun Hung Kai Co.
"But whether the market can keep rallying is really up to the regulatory environment and corporate earnings recovery story."
He added that "tech will keep recovering but it remains challenging for them to recover to the previous levels, given the shifted regulatory regime in general".
Optimism that China's crackdown on the tech industry could be winding down lifted other sectors that have been in Beijing's crosshairs, including casinos and developers.
Troubled Evergrande was up about 20 percent -- after an 11 percent gain Wednesday -- on hopes for government support as it struggles under a mountain of debt.
Thursday's rally followed a strong performance on Wall Street, where an index of US-listed Chinese firms ended up 33 percent.
The advances there were also helped by an upbeat assessment of the US economy by Federal Reserve boss Jerome Powell after the bank lifted interest rates -- by a quarter-point -- for the first time since 2018.
Powell said there was little chance of a recession in the next year and noted that it was "very strong and well-positioned to handle tighter monetary policy".
He told reporters after the rate hike: "We're not going to let high inflation become entrenched. The costs of that would be too high."
The Fed was committed to using its "powerful tools" to prevent that, he added, while a gauge of future hikes suggested another six could be on the cards before the end of the year.
The move was followed by the Hong Kong Monetary Authority on Thursday lifting its own benchmark rate owing to the city's currency peg to the US dollar.
dan/oho
© Agence France-Presse
