Hong Kong stocks rise from 4-month low as China regulator vows to stabilise market

Hang Seng Index snaps six-day losing streak after CSRC says every effort will be made to maintain market momentum

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A view of the China Securities Regulatory Commission (CSRC) office building in Beijing. Photo: Simon Song

Published: 10:21am, 14 Jan 2025Updated: 4:23pm, 14 Jan 2025

Hong Kong stocks rebounded from a four-month low after China’s securities regulator pledged to stabilise the market after a wobbly start to the year.

The Hang Seng Index rose 1.8 per cent to 19,219.78 at the close, snapping a six-day, 4.5 per cent decline that dragged the benchmark to its lowest since September 23. The Hang Seng Tech Index gained 3.1 per cent. In China, the CSI 300 Index climbed 2.6 per cent, and the Shanghai Composite Index added 2.5 per cent.

Biotech firm Wuxi AppTec rallied more than 4 per cent after selling a stake in a unit. Alibaba Group Holding and Tencent Holdings, the biggest stocks on the Hang Seng gauge, also advanced.

Stability tops the agenda in 2025, and every effort will be made to maintain and cement the stabilising trend on the market, the China Securities Regulatory Commission (CSRC) said in a statement on its website after a work conference that spelled out its annual major tasks. The watchdog also said that it would collaborate with the central bank to enhance the effectiveness of the two new funding facilities that were launched last year to facilitate stock buying. The CSRC also vowed to stabilise market expectations through policy interpretation and prompt responses to critical issues.

“The authorities are trying to talk up the market by stepping up support measures during a ‘policy vacuum’ period until March,” said Shen Fanchao, an analyst at Zheshang International in Hong Kong. “While there are some bright spots in China’s economy, the general trend is a weak recovery. There’s growing pressure on a downward revision of corporate earnings.”

Investors have refrained from big bets on stocks as they await more clarity on how China will enforce the fiscal and monetary stimulus promised at top-level meetings last year. They are also waiting to see whether new tariffs will be levied on Chinese exports after the inauguration of US president-elect Donald Trump in a week. March will be the next critical window to monitor China’s policy development, with legislators gathering for the annual National People’s Congress to deliberate on the nation’s growth target and major economic policies.