China Stock Frenzy Powers Hong Kong Rally for the Sixth Consecutive Session, EV Sales Soar In September

Li Chen
02 Oct, 2024
Hong Kong

The stimulus rally in China has turned into a frenzy as investors piled in after the People's Bank of China announced measures to support financial markets.

The Hang Seng index soared nearly 4%, extending the rally to the sixth session in a row and gains to over a whopping 23%. 

Financial markets in mainland China are closed for the Golden Week holidays, and trading is set to resume next Wednesday. 

Last week, the People's Bank of China announced a raft of measures to revive investor confidence, facilitate lending to corporations and consumers, and provide support to the residential property market. 

Moreover, Beijing's policymakers pivoted their attention to reviving economic growth and supporting the property market after sitting on the sidelines for four years. 

Local authorities in Shanghai, Guangzhou, and Shenzhen eased restrictions on buying homes by lowering down payment requirements and approving purchases by nonresidents. 

Luxury property sales soared in Shanghai over the weekend, following the easing of restrictions, powering the sale of more than 11 billion yuan in just two days. 

Retail investors jumped on the bandwagon in Monday's trading, lifting the trading volume to record highs in Shenzhen and Shanghai stock exchanges. 

About HK$506 billion, or $65 billion worth of stocks, changed hands on Monday in Hong Kong, breaking the previous record on Friday. 

Trading turnover on exchanges in Shanghai and Shenzhen soared to a record high of 2.6 trillion yuan, or $371 billion, as individual and institutional investors bid up stocks. 

The improving investor confidence is expected to draw more investments from global fund managers and foreign investors as foreign investors recalibrate their China exposure. 

Despite the current euphoric market sentiment, it will take time before consumers feel the positive effect of the monetary policy easing. 

Investors are now expecting the release of significant fiscal measures from policymakers over the next two weeks, but previous measures released earlier in the year have failed to revive consumer confidence and arrest the decline in the property market. 

 

China Stock Movers 

The Hang Seng index soared 3.6% to 22,380.41, and financial markets in China were closed for National Holidays. 

Mainland China-focused property developers soared in Hong Kong trading. 

China Resources Land jumped 10.5% to HK $31.55, China Vanke soared 41% to HK $10.52, Longfor Group Holding surged 30.1% to HK $19.62, and Sun Hung Kai Properties added 6.3% to HK $90.90. 

Tech stocks also participated in the market rally, as investors warmed up to high-growth stocks and riskier assets. 

Alibaba Group added 7.1% to HK $118.20, JD.com jumped 12.1% to HK $189.0, and Tencent Holdings gained 7.7% to HK $477.80. 

Electric vehicle makers advanced in Hong Kong trading following the strong September sales driven by heavy discounting, and new models attracted new buyers. 

Li Auto advanced 13.1% to HK $122.30 and BYD increased 7.2% to HK $305.0 after five leading electric vehicle makers reported record sales in September. 

BYD sold a record 419,426 electric vehicles in September, an increase of 12.4% from the previous month and a surge of 45.9% from a year ago. 

Li Auto shipped 53,709 electric vehicles last month, a rise of 11.6% from August and a jump of 48.9% from a year ago. 

NIO Inc. increased 5.9% to HK $59.50 after the electric vehicle maker reported September vehicle sales increased 5% from the previous month and 35.4% from a year ago to 21,181. 

Xpeng advanced 3.8% to HK $54.95 after the electric vehicle maker sold a record 21,352 units, an increase of 52.1% from August and a surge of 39.5% from a year ago.