Hang Seng Index logs second weekly advance on earnings outlook as China funds step up purchases

Zhang Shidong
·2-min read

Hong Kong stocks rose, lifting the benchmark index to a second weekly advance, as strong corporate earnings encouraged mainland Chinese investors to boost their purchases.

The Hang Seng Index climbed 1.1 per cent to 29,078.75 at the close on Friday, keeping the market ahead by 0.4 per cent for the week. The Shanghai Composite Index added 0.3 per cent, brining it to a 1.4 per cent weekly gain despite record bearish bets during the week.

Sentiment got a lift from the quarterly result by Ping An Insurance (Group) and inflows from Chinese onshore traders through the Stock Connect scheme.

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Ping An jumped 1 per cent to HK$87.10 after posting a 4.5 per cent increase in first-quarter income. Mainland investors has bought combined HK$39.6 billion (US$5.1 billion) worth of Hong Kong-listed stocks so far this month, reversing total net selling of HK$12.7 billion in March, according to Bloomberg data.

“We are positive on Hong Kong stocks,” said Cheng Yu, a Shanghai-based fund manager at HSBC Jintrust Fund Management, who invests in Hong Kong stocks through the Stock Connect scheme. “Some of the first-quarter results have confirmed the strength of corporate earnings going into the second quarter.”

Markets in Asia were mixed on Friday, with Japan being the worst performer. US equities were sold overnight following news about President Joe Biden’s plan to to increase the capital gains tax on wealthy Americans.

More than 10 Hang Seng Index members including HSBC and Hong Kong Exchanges and Clearing (HKEX) are due to report through the end of April. Average profit for the 55 constituents on the primary gauge probably rose by 26 per cent, according to Bloomberg data. Low base effect may have accentuated gains due to the Covid-19 outbreak a year earlier.

HKEX added 1.3 per cent to HK$484.80. The world’s most valuable bourse operator is expected to release first-quarter earnings on Wednesday, which probably grew 85 per cent from a year earlier, according to analysts’ consensus compiled by Bloomberg.

Technology stocks led gains in Hong Kong. Meituan, China’s biggest online food delivery platform, surged 4.9 per cent to HK$306.40. Alibaba Health Information Technology rallied 5.3 per cent to HK$23.80 and Wuxi Biologics advanced 4.4 per cent to HK$115.


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