Hong Kong stocks snap 2-day decline on China policy hopes after soft economic data
China’s industrial output and fixed-asset investment fell short in May, and the downturn in the property market deepened
The Hang Seng Index rose 0.7 per cent to 24,060.99 at the close, ending a two-day decline triggered by the military strikes in the Middle East. The Hang Seng Tech Index gained 1.2 per cent. On the mainland, the CSI 300 Index advanced 0.3 per cent, and the Shanghai Composite Index added 0.4 per cent.
A mixed bag of economic data fuelled expectations that Beijing will take more measures to put a floor under growth. Uncertainty over the US’ so-called reciprocal tariffs underscores the importance of reviving domestic demand to offset the negative impact of slowing exports. In a State Council meeting on Friday, Premier Li Qiang said that China would ramp up policy support to stabilise and prevent property prices from falling further.
“With an uncertain global macro backdrop, policymakers are likely to further support domestic household demand and private enterprise in the coming months to achieve the year’s growth target,” said David Chao, a strategist at Invesco. “Chinese equities in particular should benefit from a ramp-up in government support, as valuations are still at reasonable levels and investors focus on major technology developments in key fields such as artificial intelligence.”
