Equities 2 MIN READ

China, HK stocks gain as recovery hopes trump weak factory activity data

January 3, 2023By Reuters

China and Hong Kong stock ended the first trading session of 2023 on a bullish note, as investors brushed aside dismal December factory activity data, betting on post-COVID era recovery.

** China’s CSI300 Index rose 0.4% on Tuesday, while the Shanghai Composite Index gained 0.9%.

** Hong Kong’s Hang Seng Index, which fell more than 2% earlier in the session, ended up 1.8%.

** A private survey showing China’s factory activity shrank at a sharper pace in December had dented sentiment early in the session.

** Although rising COVID-19 infections are holding back the economy, “the pace of recovery is expected to accelerate in 2023,” the fund unit of Ping An Insurance (Group) Co said in a note on Tuesday.

** “After COVID cases peak, people’s life becomes normal, and policy support measures take effect, market sentiment will be repaired and China’s A-share market will continue to recover.”

** The market was also aided by hopes of some easing in geopolitical tensions, after U.S. Secretary of State Antony Blinken spoke on Sunday with incoming Chinese Foreign Minister Qin Gang, who said he looked forward to maintaining close working ties with Blinken and promoting Sino-U.S. relations.

** In China, tech shares .CSIASITI and healthcare stocks posted solid gains, but consumer staple .CSICS and financial shares fell.

** An index tracking tourism shares fell 2%, following weaker-than-expected tourism data during the three-day New Year holiday.

** Chinese property stocks rose. Shares of Poly Developments and Holdings Group jumped as much as 5.6%, after the company unveiled plans to raise up to 12.5 billion yuan ($1.81 billion) via private share placement.

** But Huatai Securities Co Ltd tumbled in both China and Hong Kong, after saying it plans to raise 28 billion yuan ($4.07 billion) via share placements.

(Reporting by the Shanghai Newsroom; Editing by Vinay Dwivedi)

This article originally appeared on reuters.com

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