Hong Kong stocks surge for second straight weekly gain on earnings, PBOC support pledge
Hong Kong stocks recorded the biggest gain in more than two weeks, spurred by a tech sector rally led by JD.com after its strong earnings. A People's Bank of China (PBOC) pledge of more policy support bolstered the mood.
The Hang Seng Index added 1.9 per cent to 17,430.16 on Friday to record a second straight weekly gain. The Tech Index jumped 2.2 per cent, while the Shanghai Composite Index added less than 0.1 per cent.
E-commerce platform JD.com rallied 8.9 per cent to HK$108.20, the biggest winner among the 82 blue-chip index members, after its quarterly profit nearly doubled despite intensifying competition. Peer Alibaba advanced 4.8 per cent to HK$80.10 after it reported 4 per cent revenue growth in the June quarter, and Tencent gained 1.1 per cent to HK$372.60.
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"The positive has been the earnings cycle," given that the macro environment is still soft, Wendy Liu, JPMorgan's chief Asia and China equity strategist, said in a media briefing earlier this week. The MSCI China Index got "a little bit of an upwards revision" since July, and consensus calls for 14 per cent year-over-year growth, she said.
"With China equities, when you get the earnings working, then you get the multiples and the flows will follow," she added.
Sentiment got a further boost after Beijing hinted at more supportive measures. The PBOC will step up efforts to make sure the fiscal and monetary policy measures already introduced this year will be effectively implemented, Pan Gongsheng, governor of the central bank, said in an interview with state-run CCTV on Thursday.
The bank will also prepare "incremental policy measures" to help the country's economy achieve its full-year growth target, he added.
Limiting gains on Friday, sportswear maker Li Ning slid 0.8 per cent to HK$13.10 after its first-half profit slipped 8 per cent amid China's consumption slowdown. The flagship companies of the family of billionaire Li Ka-shing, CK Hutchison and CK Asset, slipped by 3.7 and 2.5 per cent, respectively, after profits weakened in the first half amid global trade conflicts and a property market slump at home.
Elsewhere, Suzhou Kematek, a ceramic material producer, surged nearly 370 per cent from the issue price to 37.46 yuan on its first day of trading in Shenzhen.
Other key Asian markets advanced. Japan's Nikkei 225 jumped 3.6 per cent, Australia's S&P/ASX 200 Index climbed 1.4 per cent, and South Korea's Kospi Index added 2 per cent.
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