Hong Kong stocks gain on stimulus hopes; Meituan and New World Development lead gains

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Hong Kong stocks reverse earlier losses as weak China data spurs hope for more stimulus from Beijing

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A woman stood outside Hong Kong’s stock exchange. Photo: Reuters

Jiaxing Li

Published: 10:26am, 16 Sep 2024Updated: 5:13pm, 16 Sep 2024

Hong Kong stocks reversed losses to climb for a third day, as lacklustre Chinese economic data spurred hope that Beijing would roll out more stimulus, while the US Federal Reserve’s imminent easing cycle lifted sentiment.

The Hang Seng Index gained 0.3 per cent to 17,422.12 on Monday, after losing as much as 1.1 per cent in earlier trading. The Tech Index jumped 0.5 per cent; mainland markets are closed through Tuesday for a holiday.

Food delivery platform Meituan advanced 2.8 per cent to HK$126.50 and Tencent gained 1.1 per cent to HK$379. New World Development rallied 5 per cent to HK$6.75, Sun Hung Kai Properties added 1.5 per cent to HK$79 and Henderson Land added 1.5 per cent to HK$23.80, leading gains among local developers ahead of the Fed’s rate decision.

Economic data released over the weekend showed China’s industrial production, retail sales and fixed-asset investment all fell short of expectations for August. In addition, credit growth eased on a sustained decline in demand from households and companies. That is pressuring Beijing to step up monetary easing and stimulate domestic demand, analysts said.

“We think the disappointing activity, credit and inflation data will prompt the central bank to roll out more monetary easing soon”, Barclays economists, including Jian Chang, said in a note on Monday.

The People’s Bank of China (PBOC) could deliver a 50-basis-point cut in the reserve requirement ratio (RRR) for banks in the coming weeks – likely this month – followed by another cut of half a point in the first half of next year, they said.