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Hong Kong stocks surge for second straight weekly gain on earnings, PBOC support pledge
- China’s central bank will prepare more ‘incremental policy measures’ to make sure the economy hits its growth target, its governor said
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Hong Kong stocks recorded the biggest gain in more than two weeks, spurred by a tech sector rally led by JD.com after its strong earnings. A People’s Bank of China (PBOC) pledge of more policy support bolstered the mood.
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The Hang Seng Index added 1.9 per cent to 17,430.16 on Friday to record a second straight weekly gain. The Tech Index jumped 2.2 per cent, while the Shanghai Composite Index added less than 0.1 per cent.
E-commerce platform JD.com rallied 8.9 per cent to HK$108.20, the biggest winner among the 82 blue-chip index members, after its quarterly profit nearly doubled despite intensifying competition. Peer Alibaba advanced 4.8 per cent to HK$80.10 after it reported 4 per cent revenue growth in the June quarter, and Tencent gained 1.1 per cent to HK$372.60.
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“The positive has been the earnings cycle,” given that the macro environment is still soft, Wendy Liu, JPMorgan’s chief Asia and China equity strategist, said in a media briefing earlier this week. The MSCI China Index got “a little bit of an upwards revision” since July, and consensus calls for 14 per cent year-over-year growth, she said.
“With China equities, when you get the earnings working, then you get the multiples and the flows will follow,” she added.
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