Hong Kong’s main stock index surged on Monday, inching closer to entering a bull market after rebounding from its lowest point in over five years earlier in the year.
The Hang Seng index climbed 1.5% to reach 17,916.0 points by 23:47 ET (03:47 GMT), marking a five-month high. With the index trading more than 20% above its mid-January lows, a close at these levels would confirm a bull market.
The rally was largely fueled by gains in technology and property stocks. Positive earnings reports from U.S. tech giants Microsoft Corporation and Alphabet Inc boosted confidence in the tech sector, particularly in artificial intelligence-related investments.
Property stocks saw a surge after the Chinese government relaxed house buying restrictions in several major cities, aiming to bolster the struggling property market.
Additionally, upbeat earnings results contributed to positive sentiment. Insurer AIA Group Ltd soared by up to 10% following strong first-quarter earnings and a $2 billion increase in its stock buyback plan.
The recent upward trend in the Hang Seng index over the past 10 days reflects growing optimism about China's economic recovery and expectations of further stimulus measures from Beijing.
However, the local stock market remains sensitive to any negative indicators regarding Chinese economic growth or regulatory conflicts with the U.S.
Although the Hang Seng has gained 6.5% so far in 2024, it continues to recover from a significant decline over the past three years due to China's slow economic recovery. This has attracted some investors seeking bargains in local stocks.
Despite this, foreign capital inflows have decreased in recent years due to ongoing concerns about China's economic slowdown. Nevertheless, Hong Kong remains a crucial gateway for investments into mainland China.
Paraphrasing text from "Investing" all rights reserved by the original author.
