HONG KONG — Chinese and Hong Kong stocks continued their gains on Wednesday as market participants welcomed the easing of COVID-19 measures in the city of Guangzhou and auto stocks surged on potentially favorable policies.
Southern Guangzhou city eases COVID prevention rules in multiple districts including Fanyu, Tianhe, Conghua, Huadu and Liwan, boosting investor sentiment weakened by worse-than-expected Chinese factory and service activity data .
China’s leading CSI 300 index was up 0.12% and the Shanghai Composite Index was up 0.05%.
Hong Kong’s Hang Seng Index rose 2.16% and the Hang Seng China Enterprises Index rose 2.21%, making up for early losses.
An official survey showed factory activity in China contracted at a faster pace this month, weighed down by the containment of COVID and softening global demand.
The official manufacturing Purchasing Managers Index (PMI) hit a seven-month low of 48.0 compared to 49.2 in October.
“Economic activity is likely to weaken further in December and the first quarter,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
“Nevertheless, market sentiment is improving as investors look ahead to weaker economic data in the near term. A key question on the minds of investors is how long this reopening process will take. about it.”
Auto stocks led October’s strong sales rally despite the impact of the coronavirus. Sentiment was also heightened by reports of an industry move suggesting the government to extend the purchase tax exemption for ICE vehicles.
BYD, an electric car maker, said it will launch a car in Mexico next year, aiming to sell up to 30,000 units in 2024. The company’s stock price jumped 4.5% for him.
CSI’s all-stock auto index rose 6.1%, while new energy vehicles rose 1.8%.
In Hong Kong, Geely Auto surged 10.9%. The Hong Kong-listed mainland property developer fell 0.9% on Tuesday after he rose 8%.
According to the Financial Times, China has enlisted tech giants Alibaba and Tencent to help it tackle its chip design efforts. The Hang Seng Tech Index closed up 2.8%.
HSBC Holdings’ Hong Kong-listed shares rose 2.2%, boosting returns to shareholders in the second half of 2020 as the bank agreed to sell its Canadian operations to Royal Bank of Canada for C$13.5 billion ($10 billion) in cash. It paved the way for potentially huge payouts. line. (Reporting by Summer Zhen; Editing by Savio D’Souza and Subhranshu Sahu)