Hong Kong stocks snap two-day drop as weak manufacturing report spurs bets on China to support economy

The Hang Seng Index rose 0.7 per cent to 16,632.93 at 11.05am local time, paring the drop this week to 1.7 per cent. The Tech Index jumped 1.7 per cent while the Shanghai Composite Index added 0.2 per cent.

PC maker Lenovo surged 7.2 per cent to HK$9.29 while Meituan surged 7.3 per cent to HK$85.65 and chip maker SMIC added 2.7 per cent to HK$17.24. Property developer Longfor Group climbed 0.5 per cent to HK$9.93 and peer China Resources Land gained 0.6 per cent to HK$24.25.

Among top losers, online game operator NetEase slumped 2 per cent to HK$172.70 after fourth-quarter revenue trailed market consensus. New World Development weakened 4.8 per cent to HK$9.40 after revenue fell 25 per cent in the second half of 2023.

A separate PMI manufacturing gauge compiled by Caixin and S&P Global Ratings, which tracks smaller Chinese manufacturers, rose to 50.9 from 50.8 in January. The reading exceeded the consensus estimates of 50.7 among economists.

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Both reports are likely to renew pressure on policymakers to respond next week when they gather for the annual legislative meeting next week, where economic and social targets are set for the coming year. The National People’s Congress will convene on Tuesday in Beijing.

The Hang Seng Index climbed 6.6 per cent in February, the most since a 10 per cent rally in January 2023, buoyed by market intervention by China’s state-run funds and Hong Kong’s latest move to scrap its decade-old curbs on property financing and purchases.

Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 1.6 per cent and Australia’s S&P/ASX 200 added 0.3 per cent, while South Korea’s Kospi Index retreated 0.4 per cent.