Hang Seng Index Extends Weekly Gain to 7% On Earnings Optimism

Li Chen
26 Apr, 2024
Hong Kong

Stocks in Shanghai and Hong Kong advanced and extended weekly and monthly gains amid earnings optimism and supportive policy measures. 

Market sentiment was positive after CNOOC, the state-owned oil giant, reported a 24% increase in profit in its latest quarter. 

Earlier in the week, Hong Kong Exchanges and Clearing, Li Ning, and Ping An reported better-than-expected quarterly results. 

The broader CSI 300 index, tracking stocks on mainland China, extended the weekly gain to 0.9%, and the reference index in Hong Kong soared 7% in the week and the month, respectively. 

The CSI 300 index increased 1% to 3,566.74, and the Hang Seng index soared 2% to 17,626.75. 

Foreign investors have been cautiously bargain hunting in state-owned companies and tech companies that confirm the government's policy. 

However, China's government is known for its swift change in priorities and arbitrary and selective implementation of laws and rules, which could rapidly change investment scenarios. 

CNOOC advanced 4.2% to HK$19.88, Sinopec Shanghai Petrochemical rose 1.8% to HK1.10, and China jumped 3.2% to HK$7.60. 

Electric vehicle makers participated in the market rally, and BYD jumped 4.5% to HK$214.80, Li Auto added HK$97.85, and Xiaomi advanced 4.1% to HK$17.28. 

BYD acquired $27.8 worth of its stock in Thursday's trading. 

Guolian Securities jumped 15.5% to HK$3.40, and the brokerage firm plans to acquire privately held Minsheng Securities.

Guolian said it plans to fund the acquisition through the sale of its shares. 

China's securities industry is struggling, and amid the four-year downturn that has seen trading activities plunge and thousands of jobs eliminated, the industry is poised for consolidation. 

Citic Securities jumped 5% to HK$12.18, and China International Capital Corp. rose 5% to HK$9.32. 

In overnight trading in New York, market indexes extended losses after the U.S. economy expanded at a slower annual pace of 1.6% in the first quarter, and consumer prices rose at a faster pace of 3.4%. 

The latest economic data suggests that the U.S. Federal Reserve is likely to hold rates steady at its next policy meeting in June amid stubborn inflation. 

Elsewhere in Asia, market indexes in Tokyo advanced 0.7% after the Bank of Japan held interest rates steady but lifted its inflation outlook, signaling a possible rate tightening later in the year. 

The central bank was widely anticipated to hold rates steady and end negative rates for the first time after eight years at its last meeting in March.