Hong Kong stocks climbed for a third day to a fresh four-month high as the stimulus rally continued, but local developers declined amid New World Development’s trading suspension.
The Hang Seng Index jumped 2.3 per cent to 19,572.45 at local noon trading break, the highest level since May 20. The Tech Index surged 4.2 per cent, while the Shanghai Composite Index added 0.6 per cent to hit a two-month high.
E-commerce giant Alibaba Group Holding advanced 5.3 per cent to HK$96.10, rival JD.com surged 6.5 per cent to HK$134 and search-engine operator Baidu rallied 6 per cent to HK$94.05. Sportswear maker Li Ning jumped 9.5 per cent to HK$16.90, and hotpot chain Haidilao gained 11 per cent to HK$16.16.
The city’s benchmark index has advanced 7.3 per cent in a three-day winning run, restoring more than US$232 billion of market capitalisation to local stocks. The People’s Bank of China’s surprise stimulus package earlier in the week sparked renewed hopes that Beijing is willing to pull all the stops to get the stagnant economy moving.
The current rally might still have room to run, as exceptionally low investor expectations, undemanding valuations and light positioning all provide a contrarian buy signal, Bank of America said in a report to clients.
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