HONG KONG: Hong Kong and mainland stocks rallied more than four percent Wednesday after forecast-busting Chinese data showed factory activity expanding at its fastest pace in over 10 years, indicating the economy is rebounding from zero-Covid.

The Hang Seng Index jumped 4.21 percent, or 833.77 points, to 20,619.71.

The Shanghai Composite Index added 0.90 percent, or 32.74 points, to 3,312.35, while the Shenzhen Composite Index on China’s second exchange gained 1.01 percent, or 21.73 points, to 2,163.82.

China’s manufacturing purchasing managers index (PMI) came in at 52.6 last month, its highest since 2012 and up from 50.1 in January, as the economy reopened after years of strict pandemic controls that hammered businesses.

Hong Kong stocks extend losses at close

A survey of analysts had forecast the reading to come in at 50.6. Any reading above 50 indicates the sector is expanding.

While there were “significant seasonal and event factors” behind the latest data, the “overall trend still points to a solid recovery at the beginning of 2023”, said Zhou Hao of Guotai Junan International.