Hong Kong stocks advanced on Friday, with the city’s benchmark pulling off a weekly gain on expectations for improved earnings in some industries and additional policy support from Beijing to spur growth.
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The Hang Seng Index rose 0.5 per cent to 24,139.57 at the close and the Hang Seng Tech Index gained 0.6 per cent. On the mainland, the CSI 300 Index added 0.1 per cent and the Shanghai Composite Index was little changed.
Wuxi AppTec jumped 10 per cent to HK$88.15 after saying its first-half profit likely more than doubled from a year earlier. Affiliate Wuxi Biologics surged 3.7 per cent to HK$26.65. Mengniu Dairy rallied 2 per cent to HK$16.24 after saying it repurchased HK$6.35 million (US$808,932) worth of stock on Thursday. Alibaba Group Holding, owner of the Post, added 1.8 per cent to HK$105.10. Rival JD.com fell 0.2 per cent to HK$123.30 after HSBC said increased e-commerce subsidies and investments in the food delivery business would erode margins.
The Hang Seng Index rose nearly 1 per cent this week as investors seemed to have moved on from tariff news even after US President Donald Trump unveiled levies on a slew of key trading partners. Sentiment also got a boost ahead of a Politburo meeting scheduled for later this month, as recent data on China’s entrenched deflation had raised expectations for more robust stimulus measures. The S&P 500 closed at a record high on Thursday.
“Most global equity assets have rebounded to their highs of the year and that means investors think the worst of the tariff issue is already behind them,” said Zhang Yusheng, an analyst at Everbright Securities. “China’s domestic policies will remain proactive to deal with the fallouts of the tariffs in extreme scenarios like the first half. There’s room for a ramp-up of policy support.”
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Morgan Stanley said China made a promising initial step in tackling the nation’s overcapacity issues by highlighting “anti-involution” in industries including solar, lithium batteries and new-energy vehicles at high-level economic meetings. Still, this initiative was in its very early stages and required more clarification in terms of scope and execution, the US bank said in a report on Thursday.