HONG KONG: Hong Kong stocks were marginally up on Tuesday as HSBC soared after reporting a tripling in quarterly profit, while investors cautiously evaluated China activity data over the holiday weekend.
Hang Seng Index inched up 0.2%, while Hang Seng China Enterprises Index dipped 0.33%.
HSBC Holdings Plc posted a pretax profit of $12.9 billion for the quarter ended March, versus $4.2 billion a year earlier, much higher than market expectations.
HSBC’s Hong Kong shares surged 4.5% as the bank gave positive guidance and launched an up to $2 billion buyback plan. Meanwhile, China’s manufacturing activity unexpectedly shrank in April but mobility indicators suggest the current long Labour Day holiday likely hit a record in terms of number of travellers. “China’s service sector continues to grow strongly while the manufacturing sector shows signs of weakening,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
These mixed signals will likely keep the pressure on the government to continue its supportive fiscal and monetary policies in the second quarter.
On the geopolitical front, U.S President Joe Biden told his Philippine counterpart Ferdinand Marcos Jr. that the US commitment to the defence of its ally was “ironclad,” including in the South China Sea, where Manila is under pressure from China.
Hong Kong’s economy grew 2.7% in the first quarter of 2023, John Lee, the leader of the Asian financial hub, said in a surprise announcement ahead of the 0830 GMT release of official data, to snap four consecutive quarters of contraction.
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