Hong Kong Stocks Post Strong Gains; Focus Shifts to Federal Reserve Meeting

Hong Kong Stocks Surge – Hong Kong’s stock market experienced a notable uptick on Monday, buoyed by a strong performance in technology shares. The Hang Seng Index closed up 0.8% at 17,569.57, building on Friday’s substantial gains. The Tech Index saw a significant increase of 1.7%, after climbing as much as 3% earlier in the day, while the Shanghai Composite Index also advanced by 0.5%.

Notable Stock Performances

JD Health International led the charge with a 7.9% rise to HK$23.15. Its parent company, JD.com, gained 3.9% to HK$112.40, following a quarterly profit nearly doubling despite growing competition. Xiaomi saw a modest increase of 1.7% to HK$17.62 ahead of its earnings report scheduled for Wednesday. Similarly, Baidu, the search engine giant, climbed 2.4% to HK$85.80 as it prepares to announce its results on Thursday.

Li Auto emerged as a standout performer, with its stock surging 5.3% to HK$80.65, leading gains among automakers. Xpeng also saw a notable rise, advancing 3.8% to HK$27.60.

Investor Focus Shifts to Federal Reserve and Earnings Season

Investors are closely watching the Federal Reserve’s annual meeting in Jackson Hole, Wyoming, this week, anticipating signals that could lead to an interest rate cut next month. U.S. stocks ended their best week of the year on a high note, recovering from earlier economic slowdown concerns.

Kenny Ng, a securities strategist at China Everbright Securities International, noted that the Hong Kong stock market might show short-term upward momentum this week. He highlighted that overseas markets have reported robust gains and concerns about a U.S. recession are diminishing, increasing the likelihood of a rate cut in September. Additionally, the earnings season, which will determine the market’s direction, is underway. Hong Kong Exchanges and Clearing will report its interim results on Wednesday, followed by insurance giant AIA on Thursday.

Stocks Underperforming

Despite the overall positive trend, some stocks faced declines. Zhongsheng Group Holdings, a car dealer, dropped 3.4% to HK$9.26, extending its year-to-date decrease to 47.8%. Hong Kong and China Gas fell 1.1% to HK$6.43, reflecting challenges in gas demand as indicated by its interim earnings.

Suspended Stock Resumes Trading

Best Mart 360 Holdings resumed trading on Monday after a suspension following the arrest of its CEO, Hui Chi-kwan, by the Independent Commission Against Corruption on bribery allegations. The snack vendor’s shares fell up to 13.5% before closing 1.3% lower at HK$1.54.

Index Changes and Future Outlook

Semiconductor and electronics equipment manufacturer ASMPT edged down 0.4% to HK$85.30, following news that it will be included in the 30-member Hang Seng Tech Index.

China’s National Council for Social Security Fund has committed to increasing investments in strategic and innovative sectors, in line with recent government pledges to bolster economic recovery.

Regional Market Updates

In other regional markets, Japan’s Nikkei 225 fell 1.8%, South Korea’s Kospi declined 0.9%, while Australia’s S&P/ASX 200 inched up 0.1%.

FAQ: Hong Kong Stocks Surge Amid Tech Rally