Hong Kong stocks surge on signs of China market intervention as regulator pledges to stem rout, tackle manipulation, short selling
The Hang Seng Index climbed 2 per cent to 15,824.08 as of 11.24am local time, the most since January 24, while the Tech Index rallied 3.3 per cent. The Shanghai Composite Index added 0.9 per cent and the gauge tracking the Shenzhen bourse advanced 1.2 per cent.
Alibaba Group surged 5.9 per cent to HK$74.85 and Meituan gained 4.3 per cent to HK$67.90, while Tencent added 1.8 per cent to HK$284.60. China’s biggest chip maker SMIC rose 2.2 per cent to HK$28.35 and property developer Longfor Group added 5.4 per cent to HK$8.79.
Central Huijin Investment, a unit of China’s US$1.24 trillion sovereign wealth fund, said on Tuesday it had bought more index-based exchange-traded funds (ETFs) “to maintain the stability of the capital market”. It did not disclose the amount, in what was its second purchase of ETFs tracking yuan-based shares since October.
“Policymakers are worried about such perennial declines in stocks and obviously want stocks to stabilise before the coming Lunar New Year,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “These measures will work for now to ease selling pressure.”
China stocks rout exposes risk from US$30 billion of ‘snowball’ derivatives
China stocks rout exposes risk from US$30 billion of ‘snowball’ derivatives
Hong Kong and China’s markets are ranked as the worst performers globally this year, with the stock gauges falling more than 7 per cent. Investors are disappointed with China’s lack of forceful stimulus measures to rejuvenate the economy since its post-Covid growth lost momentum, while consumer and produce prices fell.
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A vanishing fairyland dream: how China Evergrande rose, then crashed
A vanishing fairyland dream: how China Evergrande rose, then crashed
The CSRC reiterated on Monday that it has zero tolerance for misconducts, including “vicious short selling” and warned of severe punishment. The watchdog also cited two cases of market manipulation to emphasise its scrutiny on market activities. The warning followed earlier measures to bar securities lending and short selling, and curb the use of derivatives that perpetuate the market slump.
Other major Asian markets all fell. Japan’s Nikkei 225 slipped 0.7 per cent, while South Korea’s Kospi retreated 0.5 per cent and Australia’s S&P/ASX 200 also fell by that much.
