Hong Kong Stocks Rose near Three-week High amid China's Opening-up Signs and Business Growth

Hong Kong stocks neared a three-week high following the report revealing the rapid expansion in China's services sector alongside a rebound in manufacturing. In response, as of the H-share market close, the Hang Seng Index gained 2.14%. Hang Seng Tech Index grew 3.57%. Hang Seng China Enterprise Index climbed 2.3%. Nongfu Spring, which soared 9.6%, and Semiconductor Manufacturing International Corporation (SMIC), which surged 6.4% led the rise.

 

 

Strategist Kenny Ng of Everbright Securities noted that investors were optimistic about China's further policy support for market development, particularly in domestic consumption and real estate, which were anticipated as the main areas for capital allocation. Premier Li Qiang reaffirmed this sentiment, emphasizing China's commitment to a structured opening of various sectors to foreign investment.

 

Bolstering the positive outlook, the Caixin China PMI for services rose to 52 in October, up from 50.3 in September, with strength in retail and tourism sectors. This growth follows government stimulus efforts introduced in late September, which were also credited with a revival in manufacturing, marking the sector's first growth since April.

 

According to Lei Meng, China equity strategist at UBS Securities, the recent policy easing has significantly shifted investor and economic expectations, suggesting an anticipated earnings recovery for A-shares in the first half of next year.

 

Following the market optimism, the three major A-share indexes closed collectively up, with the Shanghai Composite Index rising 2.32%, the Shenzhen Component Index leaping up 3.22%, and the GEM Index jumping up 4.75%.