Hong Kong stocks rise to pare weekly loss as China growth prospects brighten

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‘We believe China homebuyers’ confidence in the property market has improved markedly,’ analyst says

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An aerial photo shows a residential housing complex under construction in Huaian, in eastern China’s Jiangsu province, on October 17, 2024. Photo: AFP

Zhang Shidongin Shanghai

Published: 10:31am, 25 Oct 2024Updated: 4:26pm, 25 Oct 2024

Hong Kong stocks edged higher, trimming a weekly decline, as a rebound in property sales in China spurred optimism about the growth outlook.

The Hang Seng Index rose 0.5 per cent to 20,590.15 at the close, paring the weekly loss to 1 per cent. Xinyi Solar Holdings paced the gain on expectations that China will take action to tackle overcapacity in the industry and the US will cut tariffs on some imported photovoltaic products. The Hang Seng Tech Index gained 1.2 per cent.

Mainland benchmarks also advanced. The CSI 300 Index climbed 0.7 per cent, and the Shanghai Composite Index added 0.6 per cent.

In an encouraging sign for the economy, residential presales for 30 key cities in China rose by 22 per cent from a high base in the previous seven-day period last week, according to financial data provider Wind. First-tier cities led the increase across the country, with sales rising 27 per cent last week, the data shows. In the previous week, nationwide sales jumped 58 per cent week on week.

A decline in US Treasury yields, which had recently been driven up by the fading hope of an aggressive interest-rate cut and the rising odds of Donald Trump winning the presidential election, also stirred buying interest.

“Given policymakers’ resolve to save the property market with a slew of strong new measures announced since late September, we believe China homebuyers’ confidence in the property market has improved markedly,” said Raymond Cheng, managing director at CGS International Securities in Hong Kong. “We expect monthly industry sales in the fourth quarter to register year-on-year growth. For 2025, we think industry sales could see positive year-on-year growth for the first time since 2022.”