Hong Kong stocks rise following US and Europe equities


Hong Kong technology shares rose on Monday to extend a rally last week after Beijing signaled it would step in to support the market.

The Hang Seng Tech index rose, paring back steep early gains to be up 0.8 per cent mid-morning. The moves followed a Chinese market rally last week after Beijing said it would introduce “favorable” measures to support the economy and financial markets.

Hong Kong-listed Chinese property stocks lost as much as 3.7 per cent in early trading after Evergrande, the country’s most indebted developer, suspended trading in its shares. Trading in the company’s electric vehicle and property services units was also suspended.

The Hang Seng index rose 1.9 per cent in morning trading, but later stumbled to be up just 0.6 per cent. The biggest gains were among utilities, with gas supplier ENN Holdings rising 24 per cent.

Elsewhere in Asia, China’s CSI 300 remained flat after adding 0.4 per cent, Australia’s S&P / ASX 200 gained as much as 0.8 per cent, and South Korea’s Kospi dropped as much as 0.4 per cent. Markets in Japan were closed for a holiday.

“We have seen extraordinary movements in MSCI China in the past few days as global investors have reassessed their appetite for equity exposure to the world’s second-largest economy,” said analysts at Nomura.

They added that the negativity in the first half of the week was driven by geopolitics, with traders concerned about China’s perceived support for Russia in its war against Ukraine.

Chinese stocks have also been hit by fresh Covid-19 restrictions imposed to battle the country’s biggest outbreak since 2020 and concerns over the direction of Xi Jinping’s “common prosperity” drive, they added.

But analysts at Westpac noted that the latest restrictions appeared to be reining in infections quickly. “From the late-2021 GDP pulse and the February activity prints, it seems fair to conclude that the net economic impact of the authorities’ zero Covid-19 approach is declining,” they said.

The moves on Monday came after European stocks wiped out losses incurred since Russia invaded Ukraine last month, with indices on both sides of the Atlantic marking the largest weekly advances since November 2020.

The price of aluminum rose after mining group Rio Tinto announced it would ban exports of key aluminum ingredient to Russia, with contracts in Shanghai gaining as much as 3.1 per cent on Monday and contracts on the London Metal Exchange up as much as 4.8 per cent, according to Reuters.

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