The Hang Seng Index added 0.3 per cent to 18,461.67 as of 10.25am local time, adding to the 1.8 per cent jump on Monday. The Tech Index was little changed, and the Shanghai Composite Index weakened 0.3 per cent.
Tencent added 1 per cent to HK$378.60, food delivery platform Meituan advanced 2.5 per cent to HK$111.70 and e-commerce firm JD.com gained 0.8 per cent to HK$117.70. Hang Lung Property rallied 1.4 per cent to HK$7.40 and Bank of China (Hong Kong) added 1 per cent to HK$25.10, leading gains among local developers and lenders. China Vanke jumped 5.5 per cent to HK$5.72 and Yuexiu Property surged 7.5 per cent to HK$6.16, among mainland property stocks.
“A stabilizing China property sector benefits China equity (not only property stocks),” said Citigroup analysts in an note. “Given clear top-level determination to stabilize the sector with all-round policy turnaround and more support for standalone firms for delivery (not just for industry), we suggest a neutral to slightly bullish investment approach after recent correction in May.”
Meanwhile, the US economy showed more signs of slowing down, with manufacturing activities contracting more than expected in May, data released on Monday showed. That reinforced belief that the Federal Reserve will deliver at least one interest rate cut this year, with odds of the first cut coming through in September rising above 50 per cent, according to CME FedWatch Tool.
“The trajectory of Hong Kong market would mainly depend on whether foreign funds can continue the net inflows” going forward, Wang Yi, an analyst at Hautai Securities, said in a note on Monday. If the Federal Reserve’s monetary policy shifts towards easing, it could potentially open up further upside for the local stock’s valuation, he added.
The Hang Seng Index, which has rebounded over 23 per cent from the year’s low, are still among the cheapest among region peers with the price-to- earnings ratio standing at 9.67, according to Bloomberg data.
Limiting gains, China’s three oil giants PetroChina, Sinopec and CNOOC declined by 0.8 to 1.9 per cent on expectations that OPEC will extend production cuts. EV maker Li Auto declined 2.7 per cent to HK$80.05.
Other key Asian markets declined. Japan’s Nikkei 225 lost 0.8 per cent, Australia’s S&P/ASX 200 weakened 0.1 per cent and South Korea’s Kospi lost 0.4 per cent.