SINGAPORE: China and Hong Kong stocks rose modestly on Wednesday, buoyed by the promise of government help for the economy even though the scope and timing of stimulus measures remain uncertain.
The Shanghai Composite closed 0.5% higher and the blue-chip CSI 300 index rose 0.4% to 3,973. Hong Kong’s benchmark Hang Seng Index gained 1.3% to 20,760.
In both cases, that was well below recent peaks above 4,450 and 23,000, respectively, but also a sharp break higher from levels plumbed in a years-long downtrend while the economy has struggled with a property crunch and weak consumer confidence.
Talk of a 2 trillion yuan ($280 billion) market stabilisation fund – an idea floated by a think tank and mentioned in the press – also supported the mood.
“The chatter on the stabilisation fund is definitely helping sentiments,” said Wong Kok Hoong, head of equity sales trading at Maybank, while markets seem to be settling in to a new, and higher, range after a rollercoaster ride in the past few weeks.
“If you measure the move in the Hang Seng index from Sept. 11 to the Oct. 7 peak, you can see that market has found some support at the 50% retracement mark,” he said, with some long funds taking the lull to build their positions.
The mainland consumer staples sector rose 1.4% while green manufacturers rose nearly 2%. The electric vehicles index rose 1%.
Trading volume has been elevated for weeks as stimulus promises set off a euphoric rally, followed by a turbulent two weeks of waiting for further details.
About 65 billion shares were traded in Shanghai, higher than the 30-day moving average. Hong Kong volumes cooled slightly but have smashed records in recent weeks, helping bourse operator Hong Kong Exchanges and Clearing, log to its largest-ever third-quarter profit.
Xinyi Solar was the top gainer in Hong Kong, up 12.4% on news of a possible reduction in US import duties. Jeweller Chow Tai Fook leapt 7.8% as it reported that a slowdown in sales was moderating. Automakers Geely and Li Auto each gained over 6%.
Shares of drinks maker China Resources Beverage closed 15% higher than its offer price on debut, in a positive sign for a previously deathly quiet market for capital raising.
Source: Brecorder
