© Reuters.
Investing.com– Hong Kong’s Hang Seng index shot up on Friday as traders piled into China-exposed stocks before the reopening of mainland markets after a week-long holiday next week.
The index rose 2.4% and came close to a one-month high, with heavyweight mainland stocks seeing a bulk of gains. Real estate developers Longfor Properties Co Ltd (HK:), Country Garden Services Holdings Co Ltd (HK:) and China Resources Land Ltd (HK:) rose between 5% and 9%, while WuXi Biologics (HK:) surged 12.5% as it rebounded from steep losses earlier this week.
Local media reports showed that Chinese travel demand rose sharply during the week-long Lunar New Year holiday, driving up some hopes that consumer spending was recovering from a three-year rout.
But whether the increased holiday spending will translate into broader improvements in the economy remains to be seen, especially as Chinese economic activity showed little signs of picking up before the holiday.
Business activity and inflation readings for January had all pointed to a sustained decline in the economy, which barely managed to grow past a 5% annual growth target in 2023.
The Chinese economy was battered by a prolonged property market crisis, while sluggish consumer spending saw the economy slip into deflation by end-2023. While the government had rolled out monetary support, it had done little to spur growth- or offset a deepening rout in China’s stock markets.
The and indexes were hovering just above respective five and four-year lows last week, and saw little relief even as Beijing directed its biggest sovereign funds towards shoring up local markets.
The People’s Bank of China is now widely expected to keep its benchmark unchanged near record lows this Tuesday.
