Hong Kong Market gains 1.06%

Hong Kong stock market finished session higher on Monday, 2 August 2021, following advances in Mainland A-share market, as investors risk sentiments underpinned on expectations of increased support for the economy from Beijing's after official data showed Chinese manufacturing activity growth slowed in July.

Meanwhile, buying was spirited further as investors shifted their money into companies with attractive valuations and whose businesses are underpinned by government policy after Politburo meeting has emphasized stability again.

At closing bell, the benchmark Hang Seng Index added 1.06%, or 274.77 points, to 26,235.80. The Hang Seng China Enterprises Index rose 1.12%, or 103.38 points, to 9,336.60.

 

The sub-index of the Hang Seng tracking the commerce & industry sector added 1.19%, the properties sector added 1.31%, and the finance sector rose 0.92%, while the utilities sector fell 0.1%.

Market risk sentiments underpinned as of much-watched Politburo meeting Friday, which was seen to indicate that authorities will likely take more steps to help struggling small businesses, boost fiscal spending and possibly reduce the reserve requirement ratio for banks again.

In a Politburo meeting chaired by President Xi Jinping on Friday, senior politicians showed no signs of relenting in their campaign to rein in the industries they blame for exacerbating social inequality, widening the wealth gap and discouraging child births. Tightening the rules on the approval of overseas listings and increasing curbs on housing speculation were also on the agenda of policymakers.

The ruling Communist Party's top decision-making body said on Friday that China would stick with its current economic policies in the second half of the year, maintaining an accommodative stance amid an uneven domestic recovery and global uncertainty.

Shares of infrastructure-related companies advanced after the Politburo meeting signaled that the sale of special local government bonds will help accelerate second-half fiscal spending to support the economy. Shares of China Resources Land, Country Garden Holdings and Longfor Group Holdings rose at least 3% as investors sought safety in undervalued stocks.

China Evergrande Group jumped 7.8% to HK$5.67 after selling its internet unit HengTen for US$418 million to alleviate the cash crunch.

HSBC rose 0.9% to HK$43.45 after the UK-based lender announced to pay an interim dividend of 7 US cents per share as second-quarter profits surged by 17 times from a year earlier.

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