Hong Kong shares hit 2-1/2-year high ahead of China's return

Sands China

07/10/2024 03:43

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      Hang Seng hits highest since February 2022
    

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      SMIC soars 20%; casinos, Citic surge
    

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      China markets return from holiday a crucial test
    

  
       SINGAPORE, Oct 7 (Reuters) - Hong Kong shares hit their
highest in more than two years on Monday, with stocks in tech
and tourism surging before steadying as markets awaited the
return of China's investors from a week-long holiday.
    The Hang Seng  .HSI  rose more than 2% to 23,241.74 in early
trade, its highest since early 2022. Volumes were well below
last week's 15-year highs and the market drifted to 22,866 amid
some anxiety about the resumption of trading on the mainland.
    China's stock, bond and currency markets resume trade on
Tuesday and the open is keenly anticipated as a signal of
whether a blistering pre-holiday rally is on solid ground.
    Markets had gone to last week's break on an historic tear
thanks to the most aggressive stimulus measures since the
pandemic. Authorities cut rates and hinted at fiscal support to
shore up an economy that, by Chinese standards, is ailing.
    "Mainland investors displayed immense enthusiasm by opening
accounts on a large scale during the holiday, which seems
unabated," said Kenny Ng, strategist at China Everbright
Securities International in Hong Kong. He expects a roaring gain
of 7-10% on Tuesday, and then a test beyond that.
    "The sustainability of the A-share market's rise starting
from Wednesday will have a significant impact on the Hong Kong
stock market and overall investor confidence," he said.
    Signs of persisting euphoria abounded on Monday.
    Shares in chipmaker SMIC  0981.HK  shot more than 20% higher
on bets that government backing will be directed at the sector.
The stock is up nearly 60% in two sessions.
    Travel-exposed Macau casino operators logged large gains,
with Sands China  1928.HK  and Galaxy Entertainment  0027.HK 
each up more than 7%.
    State-owned conglomerate Citic  0267.HK  rose 9% to its
highest in a year and a half.
    China's blue-chip CSI300 Index  .CSI300  soared 25% over
five sessions, its strongest gain for such a period on record as
frenzied buying strained brokers and trading systems.    
    On Sept. 30, the index and the Shanghai Composite  .SSEC 
notched their biggest single-day percentage gains since 2008.
China-focused hedge funds are reporting explosive returns.
    The rally has taken the Hang Seng from an also-ran to the
top-performing major market so far this year, with a 33% gain
running ahead of a 21% rise for the S&P 500  .SPX .

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China stocks rally strongly    https://reut.rs/3ZQNtV0
China's benchmark stock index logs biggest daily gain since 2008
   https://reut.rs/4dmrDfq
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 (Reporting by Tom Westbrook; Editing by Jacqueline Wong)
 ((tom.westbrook@tr.com; +65 6973 8284;))