Hong Kong stocks rose by the most in a month after a private report showed the services sector in mainland China expanded last month, in contrast with a slide in factory activity.
The Hang Seng Index jumped 2.5 per cent to 18,533.34 as of 10.20am local time, the biggest advance since May 2. The Tech Index soared 3 per cent while the Shanghai Composite Index added 0.2 per cent.
All but two out of the 82 index members gained. Tencent jumped 3.4 per cent to HK$372.20, Alibaba appreciated 2.8 per cent to HK$77 and JD.com added 2.2 per cent to HK$116.40. EV maker BYD jumped 2.7 per cent to to HK$225.60 and rival Li Auto advanced 4 per cent to HK$81.30.
Caixin services purchasing managers’ index (PMI) rose to 51.7 last month from 51.4 in April, marking the fourth consecutive month of accelerated growth and the fastest pace in two years, surpassing analysts’ forecasts of 51.6, according to economists surveyed by Bloomberg. Last week’s data release showed Chinese manufacturing activity contracted last month, contrary to analyst expectations.
People walk past signage for Hong Kong Exchanges & Clearing Ltd. (HKEX) displayed at the Exchange Square complex in Central. Photo: Sam Tsang
Ahead of today’s rise, the Hang Seng Index had declined for two straight weeks on profit-booking sales after patchy earnings and an erratic economic recovery rattled investors.
“The swings of the past month were all part of the market correcting excessive pessimistic and optimistic expectations,” Kevin Liu, a strategist at CICC, said in a note on Sunday. “We believe that as risk appetite has been restored, while further upside potential in the market may require additional catalysts to emerge.”
Elsewhere, UboT Holding, which operates in the semiconductor industry and is the first debutant on the Growth Enterprise Market (GEM) in three years, jumped 20 per cent from its IPO price to HK$0.60 per share on its first day of trading on Monday.
Other major Asian markets also posted gains. Japan’s Nikkei 225 added 1 per cent, Australia’s S&P/ASX 200 jumped 0.9 per cent and South Korea’s Kospi surged 1.9 per cent.
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