Hong Kong stocks A rose extended into a third consecutive day of gains on Thursday, marking its longest winning streak in a month, following a private report indicating growth in China’s service sector which alleviated fears about an economic slowdown.
The Hang Seng Index finished trading 1.1 percent higher at 23,906.97, marking a peak last reached on March 20. This marks an increase of 3.2 percent over three days—the most significant gain since May 12. Meanwhile, the Hang Seng Tech Index saw a rise of 1.9 percent. In Mainland China, both the CSI 300 Index and the Shanghai Composite Index advanced by 0.2 percent each.
Tech stocks saw gains overall. Alibaba Group Holding climbed 3.2% to reach HK$118.30, Meituan increased by 2.6% to hit HK$144.40, and short video service provider Kuaishou Technology surged 5% to stand at HK$54.50.
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Hong Kong property developers saw gains as investors anticipated that a less severe than expected US private sector jobs report might prompt the Federal Reserve to reduce interest rates. This expectation led the territory’s monetary authorities to potentially align with these cuts to support the Hong Kong dollar's fixed exchange rate against the U.S. dollar. As a result, shares of Hang Lung Properties surged by 3.4% to reach HK$6.41, while Sun Hung KaiProperties increased by 1.1%, trading at HK$84.70.
According to data released by publishers Caixin and S&P Global on Thursday, the Caixin China services Purchasing Managers’ Index increased to 51.1 in May from 50.7 in April. This figure surpassed the projected average of 51 as per a Bloomberg survey. Any value over 50 signifies growth.
"Even as policies ease and trade uncertainties loom over the economic forecast, the central government retains substantial capacity to implement both monetary and fiscal stimulus measures aimed at bolstering growth," explained Garrett Melson, a portfolio strategist at Natixis Investment Managers.
The Hang Seng Index has climbed approximately 20 percent since hitting a low point in April, driven by hopes that the tariff disagreements between the U.S. and its international trade counterparts might be settled, along with expectations that China will increase efforts to ease monetary policies.
Earlier this week, The White House indicated that President Donald Trump might have discussions with his Chinese counterpart Xi Jinping. This dialogue has the potential to result in a lasting pact concerning tariffs following the 90-day ceasefire between Beijing and Washington established in May. Additionally, China’s central bank announced plans to reduce interest rates as a means of stimulating economic growth.
The Chinese jewelry company Laopu Gold, which boasts the highest valuation on the Hong Kong Stock Exchange, saw its shares jump up to 2.1% reaching HK$1,015 before dropping back down by 9.1%, settling at HK$904. Meanwhile, tea drink producer Mixue Group, ranked as the second-highest valued stock, declined by 7.7% trading at HK$568.
Other significant markets within the Asia-Pacific region showed varied performance. The Japanese Nikkei 225 dropped by 0.5%, and Australia’s S&P/ASX 200 declined marginally under 0.1%. In contrast, South Korea’s Kospi surged by 1.5%, continuing its upward trajectory following the inauguration of a new leader.
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The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.
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