Hong Kong Stocks Starting Good in 2023 Kickoff

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Hong Kong shares led gains at the start of the year. These gains were the most seen in the first trading session since 2018. US and Euro futures stock also rose, a good indicator of a growing risk appetite of investors.

On 3 January, the Hang Seng, Hong Kong’s stock market index, gained 1.84 per cent or 363.88 points. This is the biggest gain in the first trading session of a year since 2018. One factor that helped the start of Hang Seng was the reopening of China’s economy as the government loosened its Covid-zero policy despite the surge of covid infections.

According to Redmond Wong, market strategist for Saxo Capital Markets for greater China, “While it is inevitable to see further surges and more widespread inflection at the initial stage of opening, the outlook for the Chinese economy has brightened for 2023. In addition to the reopening, China has intensified its effort to support the distressed property sector and given property developers access to credits and equity financing, which had been denied to them for most of 2022.”

Property and technology stocks also contributed to Hang Seng’s strong start. Property and technology stocks rose more than 3 per cent, with the index exceeding 26,000. According to Refinitiv data, this was the highest level since 29 July.

According to CNBC correspondent Jihye Lee, Chinese officials are planning to support the policy to help challenged real estate developers in the country. Tech stocks also increased, with Alibaba shares rising 8 per cent. This was brought about by the approval of Ant Group’s plan to double its registered capital by Chinese regulators.

Lee added that “Electric vehicle maker Baidu rose more than 8%; Chinese video and gaming app Bilibili gained nearly 9%; Netease rose more than 5%; JD.com climbed 7%; and Tencent also rose around 4%.”

Chinese investment bank Guotai Junan Securities mentioned that Hang Seng’s performance might directly impact the global market. They believe that Hang Seng may lead the other global indices this year, expecting a 40 per cent return.

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