Hong Kong stocks gain as PBOC’s benchmark-rate choice spurs optimism on economy
Stocks pare the week’s losses as central bank’s rate decision hints at sustained recovery in the world’s second-largest economy
The Hang Seng Index climbed 1.3 per cent to 23,530.48 at the close. The Hang Seng Tech Index gained 0.9 per cent. On the mainland, the CSI 300 Index added 0.1 per cent, and the Shanghai Composite Index slipped 0.1 per cent.
Among leading gainers on the benchmark, sportswear maker Li Ning rallied 4.8 per cent to HK$15.72 and Sunny Optical Technology Group advanced 4 per cent to HK$65.15. Alibaba Group Holding rose 1.6 per cent to HK$111.70 and Tencent Holdings gained 1.5 per cent to HK$505.50.
China left the one-year loan prime rate unchanged at 3 per cent this month, and the five-year rate at 3.5 per cent, according to the central bank. Both rates were cut by 10 basis points in May.
The People’s Bank of China has delivered fewer rate reductions than expected this year, stirring expectations that the economy has been riding out headwinds such as tariffs from the US and the property market downturn. Retail sales unexpectedly rose more than estimated last month, and exports avoided a collapse despite the elevated levies from the US.
“Some of the economic data is solid,” said Xu Zhi, an analyst at Central China Securities. “Growth in exports indicates the resilience of the market and the ability of the companies to navigate through complicated situations. The economic recovery is still getting under way, but at a slow pace. Buying will probably be rotating between value and growth stocks.”