Hong Kong stocks ride 2-day wave on earnings optimism, stabilisation-fund proposal
China Unicom, Xinyi Solar and HKEX lead gainers as an analyst calls the rebound ‘sustainable’
The Hang Seng Index gained 1.3 per cent to 20,760.15 at the close. Phone carrier China Unicom advanced after posting higher quarterly profit, and Xinyi Solar Holdings led Chinese photovoltaic stocks higher on expectations that Beijing will act to stamp out oversupply. The Hang Seng Tech Index rallied 1.9 per cent.
Mainland China’s benchmarks also edged up, with the CSI 300 Index climbing 0.4 per cent and the Shanghai Composite Index adding 0.5 per cent.
Investors are gearing up for quarterly results from 22 companies on the Hang Seng Index through the end of the month, including HSBC, BYD and Industrial and Commercial Bank of China. While the earnings season is unfolding, investors will also keep a close watch on the progress on China’s fiscal stimulus. The standing committee of the National People’s Congress is due to gather in coming weeks to deliberate issues including government spending and sovereign bond sales.
“Expectations for the economy and earnings are improving after the roll-out of the stimulus packages,” said Xue Jun, an analyst at Orient Securities in Shanghai. “Given the depressed valuations and the backdrop of the rate cut in the US, the rebound in stocks is expected to be sustainable.”
So far, four constituents of the Hang Seng Index have disclosed third-quarter results, posting average profit growth of 55 per cent, according to Bloomberg data. The figure was 7.7 per cent in the previous three-month period.
