Hong Kong stocks started the second quarter on the front foot, joining a rally in regional markets after President Joe Biden unveiled a US$2.25 trillion stimulus plan while the US economy added the most jobs in six months.
The Hang Seng Index rose 2 per cent to 28,938.74 at the close of trading on Thursday, the biggest gain since March 3. That also extended a 4.2 per cent gain in the first quarter. Meituan and WuXi Biologics jumped at least 8 per cent, lifting the Hang Seng Tech Index to a 4.7 per cent surge. The Shanghai Composite Index gained 0.7 per cent.
Hong Kong’s market will be shut for three trading days from Friday to Tuesday for Easter and Chinese tomb-sweeping day, while the mainland markets will halt trading only on Monday.
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Investors shifted their focus to growth outlook after a brief shakeout stemming from the blow-up at Bill Hwang’s Archegos Capital Management. Biden’s “American Jobs Plan” will invest about US$1.3 trillion in projects from transport to cleaner water and high-speed broadband in an eight-year period. The plan will also fund US manufacturing industries and help the elderly and disabled.
“Despite higher market volatility, it’s important for investors to stay invested as economic fundamentals remain sound and central banks accommodative,” said Andy Wong, an investment manager at Pictet Asset Management.
Major stock benchmarks in the Asia-Pacific region all rose, tracking overnight gains in US equities. Japan’s Nikkei 225 rose by as much as 1.4 per cent as the fallout of the Archegos sell-off receded.
The local market was also buoyed by a Hong Kong stock exchange proposal to attract more listings in the city. The bourse operator proposes an array of rules that will make it easier for smaller companies and US-listed firms to file for secondary listings, according to a consultation paper released late Wednesday.
Hong Kong Exchanges and Clearing (HKEX) hosted 29 new and secondary listings in the first quarter, which raised a combined US$17.05 billion in proceeds, according to data from Refinitiv, the best first-quarter period since records began in the 1980s. The stock added 2.5 per cent to HK$468.60.
Trading in more than 150 stocks was suspended on the local market on Thursday for missing a deadline on earnings reports. That included Hainan Meilan International Airport, solar-panel maker GCL-Poly Energy Holdings and bad-loan manager China Huarong Asset Management, according to stock exchange filings.
China Evergrande Group, the world’s most indebted property developer, tumbled 3.2 per cent to HK$14.32 after posting a 26 per cent slump in core profit last year.
On the mainland, the listed units of ChemChina Group and Sinochem Group rallied after Beijing approved the merger of the two state-owned parents. KraussMaffei, an equipment design company, surged by the 10 per cent daily limit to 5.18 yuan in Shanghai and Sinochem International also jumped by that limit to 5.93 yuan.
Circuit Fabology Microelectronics Equipment surged 190 per cent from its initial public offering price to 44.10 yuan in debut on Shanghai’s Star Market. Another debutant Guangdong Fuxin Technology jumped 130 per cent to 35.90 yuan.
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