Hong Kong Stocks Rebound After China Announces Regulatory Support

Li Chen
22 Apr, 2024
Hong Kong

Stock market indexes in Shanghai struggled to advance, and market indexes in Hong Kong soared following regulatory reforms. 

Asian markets rebounded from a sharp selloff in the previous week due to the lowered rate-cut expectations in the U.S. 

Benchmark indexes in Tokyo edged higher by 0.5%, in Seoul jumped 0.8%, in Sydney advanced 1.0%, in Shanghai edged down 0.2%, and in Hong Kong soared 1.7%. 

The People's Bank of China held steady its 1-year and 5-year loan prime rates at 3.45% and 3.95%, respectively. 

The decision by the central bank was widely anticipated after China's economy expanded at a faster-than-expected pace of 5.3%. 

The CSI 300 index decreased 0.2% to 3,533.98, and the Hang Seng index rose 1.7% to 16,506.66. 

Hong Kong indexes rose after the China Securities Regulatory Commission announced reforms to facilitate the listing of mainland Chinese companies on the Hong Kong Stock Exchange. 

The move comes after the Hang Seng index plunged more than 40% over the last three years as foreign investors fled Chinese stocks. 

The securities regulator also said it plans to enhance the Stock Connect system that will facilitate trading in mainland China companies listed on stock exchanges in mainland China. 

Tech stocks advanced and participated in the market rally. 

Tencent Holdings jumped 4.4% to HK$318.20, Meituan jumped 4.9% to $100.0, and Alibaba Group advanced 3.3% to $68.90. 

Oil-related stocks traded lower after crude oil prices fell in international trading following the easing of tensions between Iran and Israel and rising inventories in the U.S. 

PetroChina decreased 2.2% to HK$7.33, and CNOOC declined 2% to HK$18.26. 

Electric vehicle makers were under pressure after the price war intensified in the industry. 

Tesla lowered prices by 5% in mainland China for its electric vehicle manufactured in a Shanghai-based facility. 

Li Auto declined 9.6% to HK$26.38, Geely Automotive rose 1.2% to HK$8.92, and BYD fell 0.6% to HK$200.40.