Li Auto, Xpeng lead EV winners as Hang Seng hits 7-week high and logs best month since May

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The Hang Seng Index completed another winning week as gains in EV makers lifted the market to its highest close since July 15

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People walking past electronic boards outside the Exchange Square in Central in April 2024. Photo: Jelly Tse.

Mia Castagnonein Shanghai

Published: 10:30am, 30 Aug 2024Updated: 4:55pm, 30 Aug 2024

Hong Kong stocks rose, logging another winning week after investors scooped up Chinese electric vehicle makers like Li Auto, Xpeng and BYD after a recent sell-off. Regional markets also appreciated as sentiment improved on the back of positive US economic signs.

The Hang Seng Index advanced 1.3 per cent to a seven-week high of 17,989.07 on Friday, bringing the rally this week to a 2.1 per cent. The Tech Index jumped 2.9 per cent, while the Shanghai Composite Index added 1.3 per cent.

Nio led gainers with a 10.7 per cent surge to HK$33.60 while Xpeng jumped 8.3 per cent to HK$31.85, Li Auto climbed 7.8 per cent to HK$78.85 and Geely Auto gained 2.2 per cent to HK$8.82. BYD strengthened 6 per cent to HK$241.20 after UOB-Kay Hian raised its recommendation to hold from sell after earnings rose 33 per cent last quarter.

Signage outside the HSBC headquarters building on July 26, 2024. Photo: Bloomberg

HSBC gained 0.5 per cent to HK$68.60. The UK banking group announced a management shake-up, days before Georges Elhedery takes over the reins as CEO of the biggest lender in Hong Kong.

The city’s benchmark stock index has risen 3.7 per cent in August, snapping a two-month losing streak, as investors turned bullish on rate-cut hopes. Federal Reserve’s chair Jerome Powell last week said it was time to alter its hawkish policy after US inflation cooled.

Traders bet the Fed will cut rates at its next meeting on September 17-18, according to CME Group. The odds are also for a full percentage point reduction by the end of the year. This has helped strengthen the Chinese yuan, boosting the appeal of local assets, according to Jason Chan Wai-chung, a senior investment strategist at the Bank of East Asia.

Economic data this week showed US output grew at a slightly stronger pace in the second quarter than initially reported, reflecting an upwards revision to consumer spending. The report underpinned optimism rate-cut expectations amid heightened recession concerns.