Hong Kong Stock Indexes Rise Over 2% Before Closing Slightly Lower
The three major Hong Kong stock indexes experienced a collective strengthening today, with each index rising by more than 2% during the session. Although they fell slightly in the afternoon, they maintained a narrow range. At the close, the Hang Seng Index rose 1.58% or 272.11 points to 17,485.98 points, with a turnover of HK$47.99 billion. The Hang Seng State-owned Enterprises Index also rose by 1.47% to 5,974.30 points, while the Hang Seng Technology Index increased by 1.55% to 3,816.15 points. However, the Hang Seng Index closed down 1.82% or 323.68 points for the week.
The positive expectations from the APEC meeting and the announcement that the Stock Market Liquidity Task Force will submit a report soon are contributing factors to the index’s rise. Additionally, the Hong Kong Exchange has stated that it is actively studying arrangements with the government and regulatory authorities to ensure the market can continue to operate during severe weather conditions.
Zhongtai International, a market research firm, pointed out that while Hong Kong stocks face constraints from a strong US dollar and high interest rates, there are still factors supporting growth. China’s economic recovery, easing corporate earnings pressure, inflows through the Hong Kong Stock Connect, and expectations of a meeting between the Chinese and US presidents all contribute to the positive sentiment surrounding Hong Kong stocks. According to the earnings yield difference model, the reasonable short-term trading range for the Hang Seng Index is projected to be between 16,800 and 18,500 points.
Among the blue-chip stocks, AIA (01299) saw the highest gains. The stock rose 2.35% to HK$67.50 with a turnover of HK$2.72 billion, contributing 29.21 points to the Hang Seng Index. AIA-R, a subsidiary of AIA, announced that it repurchased 2.0398 million shares on the Hong Kong Stock Exchange on October 5, 2023, at a cost of HK$135 million. This marks the latest in a series of repurchases, with the company having bought back a total of 73.2498 million shares in the past three months.
In other news, Alibaba (09988) rose 1.91% to HK$82.90, contributing 25.22 points to the Hang Seng Index; HSBC Holdings (00005) also increased by 1.80% to HK$62.05, contributing 27.79 points. However, Budweiser Asia Pacific (01876) fell by 1.76%, reported at HK$15.60, and China National Offshore Oil Corporation (00883) decreased by 0.15% to HK$13.10.
Several sectors and concepts saw gains in the market today. SaaS (software as a service), biomedicine, domestic real estate, mobile games, AIGC (artificial intelligence and generative content), and photovoltaics were among the top gainers. Real estate and technology stocks were particularly strong performers.
In the SaaS sector, Xinnuo Technology (09600) rose 14.94% to HK$1, Yidu Technology (02158) increased by 5.25% to HK$4.01, and Yunxiang Technology (02131) rose by 4.62% to HK$0.68. The rapid growth of the SaaS industry in China is driven by rising demand for software operation services, and it is expected to continue expanding in the coming years.
AIGC concept stocks, including SenseTime (00020), Meitu (01357), and China Mobile Games (00302), also had a strong performance throughout the day. Adobe’s announcement of the commercial availability of its Firefly generative artificial intelligence model contributed to the positive sentiment surrounding AIGC stocks. Adobe Firefly is a generative AI product that offers various creative features and is expected to enhance the company’s product offerings.
Additionally, the photovoltaic solar energy sector experienced gains in the afternoon. Comtec Solar (00712), Shanco New Energy (01250), and Xinyi Energy (03868) all saw significant increases in their stock prices. The recent EU Renewable Energy Directive, which sets clean energy use goals and aims to triple wind power and photovoltaic installed capacity by 2030, has contributed to the surge in photovoltaic exports from China to Europe.
Finally, CXO (chief experience officer) concept stocks rebounded collectively, with Tigermed (300347), Zhaoyan New Drug (603127), and Pharmaron (300759) showing gains. The global clinical stage for new drug research and development remains active, with expectations of a return to rapid growth in the sector as overseas investment and financing recover.
Overall, the Hong Kong stock market showed resilience and positive momentum, driven by various factors such as positive expectations, liquidity reports, and support from government and regulatory authorities.