Most Hong Kong stocks advanced as Chinese property developers jumped on speculation Beijing will stimulate the ailing housing market and restore growth momentum. Losses in tech companies kept optimism in check.
The Hang Seng Index rose as much as 1.4 per cent before closing with a 0.1 per cent loss to 19,099.28. The benchmark had risen 4.9 per cent over the preceding two trading days. The Tech Index slipped 0.2 per cent while the Shanghai Composite Index tumbled 1.2 per cent.
Developer Longfor Group surged 7.8 per cent to HK$18.34 while peers Country Garden jumped 6.2 per cent to HK$1.55 and China Resources Land strengthened 4.6 per cent to HK$32.95. Tencent Holdings fell 2.1 per cent to HK$331.20, while PC maker Lenovo Group lost 1.9 per cent to HK$7.37.
The Hang Seng Index clawed its way out of bear-market territory last week on stimulus bets, and mainland media published articles to drum up support for Chinese equities despite concerns about waning confidence in the property sector and lingering geopolitical tensions.
China’s top 100 property developers reported a 9.1 per cent rise in contracted sales in the first five months this year versus the same period last year, according to real estate consultancy CRIC. Even so, sales in 2022 amounted to only about 64 per cent of pre-pandemic levels in 2019.
“As a property market hard landing has become increasingly likely and as the property fallout has continued to cripple the economy and financial markets, we believe Beijing will not sit idle,” Nomura said in a report on Tuesday. China’s recovery remains weak and stimulus may favour other priority sectors, the firm added.
Official reports this week may show more wobbles in China’s faltering economy. Exports probably fell 1.3 per cent in May from a year earlier, compared with an 8.5 per cent gain in April, economists forecast before an official report on Wednesday. A Friday report may show producer prices fell 4.4 per cent, after a 3.6 per cent drop in April.
Any unfavourable data “might tilt the balance in favour of additional and targeted PBOC stimulus in June”, Carlos Casanova, an economist at Swiss private bank UBP, said in a report on Tuesday. “This could be in the form of a reserve requirement ratio cut as well as continued support via liquidity operations and monetary aggregates.”
Elsewhere, Chongqing Xishan Science and Technology surged 41 per cent to 191.19 yuan on the first day of trading in Shanghai. Guangzhou Newlife Material rallied 38 per cent to 53.99 yuan on its debut in Shenzhen.
Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 0.9 per cent, while South Korea’s Kospi rose 0.5 per cent and Australia’s S&P/ASX 200 lost 1.2 per cent after the nation’s central bank raised its policy rate by 25 basis points.
Source: SCMP