Hong Kong stocks leap in catch-up trade after China’s manufacturing rebound; Xiaomi surges on strong EV orders

Hong Kong stocks leap in catch-up trade after China’s manufacturing rebound; Xiaomi surges on strong EV orders

Hong Kong stocks leap in catch-up trade after China’s manufacturing rebound; Xiaomi surges on strong EV orders

Hong Kong stocks jumped by the most in three weeks, with investor sentiment lifted by a manufacturing rebound in the world’s second biggest economy and as Chinese smartphone and gadget maker Xiaomi reported solid orders on its debut in the world’s biggest electric vehicles (EV) market.

The Hang Seng Index advanced 2.7 per cent to 16,988.80 as of 9.50am local time, its highest since March 13. The Tech Index strengthened 2.3 per cent and the Shanghai Composite Index gained 1.2 per cent.

Online travel agency Trip.com gained 7.3 per cent to HK$370.40, a record high after analysts at Citigroup raised its earnings estimates and target price as they said “consensus might underestimate decent outbound & international as well as margin improvement”. Bank of China (Hong Kong) rallied 7.8 per cent to HK$22.60 and China Merchants Bank advanced 2.9 per cent to HK$31.85, leading gains among lenders.

China’s official PMI manufacturing index rose to 50.8 in March from 49.1 in February, the statistics bureau said on Sunday. The reading surpassed market consensus of 50.1 and ended five months of contraction in factory activity. A separate report by Caixin/S&P Global on Monday showed the manufacturing index rose to 51.1 in March, beating analysts’ forecasts.

The Hang Seng Index had declined 3 per cent during the first quarter to extend an unprecedented four years of losses reflecting investor concerns about lacklustre corporate earnings and China’s bumpy economic recovery. The benchmark now trades at 8.76 times forward earnings, the cheapest among global majors, according to Bloomberg data.

Delton Technology Guangzhou, a circuit board producer, surged 216 per cent from its IPO price to 54.90 yuan per share on its first day of trading in Shenzhen.

Other key Asian markets were broadly higher. Japan’s Nikkei 225 added 0.4 per cent, while South Korea’s Kospi and Australia’s S&P/ASX 200 Index both gained 0.1 per cent.

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