SHANGHAI: Hong Kong and China stocks rebounded on Monday, as the release of more weak economic data supported hopes for stimulus measures soon, and investors took heart at signs of a thaw in Sino-U.S. relations, and an end to Beijing’s crackdown on internet firms.
Hong Kong’s Hang Seng Index rose as much as 2.3%, having fallen 2.9% last week to a one-month low.
China’s blue chip CSI300 Index climbed as much as 1%, while the Shanghai Composite Index gained 0.6% at one point.
China, HK stocks fall as Sino-US relations in focus
The Hang Seng Tech Index rose as much as 3.2%, led by Alibaba, which opened 5.5% higher.
China fined Alibaba’s affiliate, Ant Group, $984 million for violating laws and regulations, fuelling hopes that a years-long regulatory crackdown on the fintech sector has ended.
Market sentiment was also aided by signs of improvement in Sino-U.S. ties, after U.S. Treasury Secretary Janet Yellen said 10 hours of meetings with senior Chinese officials during her China trip last week were “direct” and “productive”.
“The fine on Ant signals the end of regulators’ crackdown on fintech companies, and greatly reduces uncertainty, so it’s positive to market sentiment,” said Mark Dong, Hong Kong-based co-founder of Minority Asset Management.
Meanwhile, there’s no negative news from Yellen’s China visit, which is construed as being positive given extremely low expectations, he said, adding signs that the yuan was becoming more stable had helped investor sentiment.
China’s factory gate prices fell at the fastest pace in over seven-and-a-half years in June, reflecting a loss of momentum in China’s post-pandemic economic recovery, and raising hopes that Beijing will deliver more stimulus measures.
Hong Kong’s property and construction stocks fell even after the city said on Friday it was raising the cap on the loan-to-value (LTV) ratio for properties worth up to HK$30 million ($3.83 million) for self-use homebuyers. It represented the first relaxation of tightening measures for home transactions since they were implemented in 2009.