Hong Kong stocks halt 3-day loss on Beijing policy catalyst, technical support

The Hang Seng Index added 0.5 per cent to 16,278.37 at 9.55am local time, after hitting the lowest level since November last year on Monday. The Tech Index gained 1.2 per cent while the Shanghai Composite Index was little changed.

Sportswear maker Li Ning rebounded 3.2 per cent to HK$18.88 to recoup some of the 14 per cent slump on Monday. Baidu climbed 1.8 per cent to HK$110.10, and JD.com added 1.2 per cent to HK$99.50. Alibaba Group gained 0.4 per cent to HK$69.05, after trimming its stake in logistics provider GogoX, whose stock slipped 3.3 per cent to HK$0.58.

New World Development rose 0.7 per cent to HK$11.16 after the billionaire Cheng family bought 700,000 shares in the Hong Kong developer on December 11, according to an exchange filing. The stock has fallen 50 per cent this year.

Today’s gain helped narrow the Hang Seng Index’s decline this month to 4.5 per cent. The index’s 14-day relative strength indicator fell to 31, according to Bloomberg data. A 30-point reading typically means a market reversal is imminent.

“Hong Kong stocks are at historical lows after a prolonged correction,” Dai Qing, analyst at Guotai Junan Securities said in a note on Monday. There could be a short-term technical rebound, he added, while potential stimulus from the Work Conference could be another catalyst, he added.

President Xi chaired the December Politburo meeting on December 8), which will be followed by the Central Economic Work Conference this week. Officials likely have acknowledged delayed and ineffective policy execution after the dovish July Politburo meeting, Goldman Sachs said.

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Chinese President Xi Jinping visits Shanghai in first post-Covid trip

Chinese President Xi Jinping visits Shanghai in first post-Covid trip

Elsewhere, US consumer prices probably rose 3.1 per cent in November, versus 3.2 per cent in October, according to economists tracked by Bloomberg. The Federal Reserve is expected to leave its key rate unchanged on Wednesday.

Wuxi Jinghai Amino Acid jumped 88 per cent to 30.93 yuan on its first day of trading in Beijing.

Most Asian markets gained. Japan’s Nikkei 225 climbed 0.7 per cent, Australia’s S&P/ASX 200 added 0.4 per cent, while Korea’s Kospi index rose 0.3 per cent.