Hong Kong stocks recover from 9-month low as sell-off hits oversold marker
Hong Kong stocks rebounded as traders considered the recent market slump to be excessive, with Chinese tech leaders such as Alibaba, AIA, and NetEase leading the way.
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Posted 8/22/2023, 8:54:08 AM
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Tech stocks rebounded on Monday, with the Nasdaq Composite climbing 1.6% and the S&P 500 adding 0.7% as bargain hunters took advantage of discounted prices, despite the 10-year Treasury yield reaching its highest level since 2007. Palo Alto Networks saw a significant surge after reporting higher-than-expected earnings and revenue, indicating strong demand for its artificial intelligence security operations platform.
Stocks rebounded on Monday, with the Nasdaq Composite leading the way, breaking its four-day losing streak and pushing Wall Street into positive territory, while bond yields continued to rise.
Hong Kong stocks have entered a bear market, dropping 21 percent from their peak, as investor concerns about China's real estate sector and economic growth continue to escalate.
Asian stock markets rebounded from an eight-day losing streak, supported by a recovery in Chinese shares, while benchmark Treasury yields reached a 16-year high on concerns of sustained high interest rates.
Hong Kong's stock market has benefited from China's rapid growth, with over 1,400 Chinese companies raising $1.05 trillion in the past 30 years.
Shares in Chinese property giant Evergrande collapsed as they resumed trading in Hong Kong after 17 months, while Asian markets advanced following Federal Reserve chief Jerome Powell's cautious approach to rate hikes and China's decision to cut the duty on trades.
China's stamp duty and margin cuts revive confidence in the Hong Kong stock market, leading to a rally in stocks such as HKEX, Alibaba, and BYD, while China Evergrande continues to struggle.
Chinese stocks rebounded briefly after Beijing implemented measures to halt the slide, but foreign investors used the opportunity to unload $1.1 billion of mainland Chinese equities, reflecting ongoing nervousness about holding capital in China.
Chinese stocks initially surged on Monday after the government implemented measures to boost investor confidence, but most of the gains were lost by the end of the session due to concerns about the country's economic slowdown and the foreign outflow of funds.
Hong Kong stocks rise on speculations of fresh capital market measures and expectations of banks cutting mortgage rates, while Chinese developers and Xiaomi contribute to the market gains.
Chinese stocks, including Alibaba, JD.com, and Baidu, rebounded as investors bought the dip, while property manager Country Garden faced liquidity pressures.
Chinese consumer spending has rebounded in certain sectors, but concerns persist over the property market and GDP growth falling below 5%, according to Shehzad Qazi, managing director of China Beige Book.
Hong Kong-listed property stocks surged after China's People's Bank of China eased borrowing rules and cut the reserve requirement ratio for foreign exchange deposits, leading the Hang Seng Index to be the top gainer in Asia, with real estate companies such as Evergrande, Logan Group, and Longfor Group experiencing a spike in shares, and Country Garden Holdings leading gains at 14.61% up.
China's stock market rebound may be temporary as corporate earnings continue to decline and companies revise down their outlooks, causing concern for foreign funds and prompting Bank of America to urge caution.
Hong Kong stocks, including SMIC, Tencent, and JD.com, dropped as weak China trade data and a depreciating yuan put pressure on the market.
On September 10, Hong Kong halted full-day stock market trading for the second time this month due to severe rainstorms and the Black Rainstorm warning issued by the local Observatory.
Alibaba's stock dropped more than 4% in Hong Kong after the ex-group CEO of its cloud computing unit, Daniel Zhang, unexpectedly quit, raising concerns about the impact on the subsidiary's spinoff plans and its weak sales growth ahead of an IPO next year.
Asian stock markets rose slightly as comments from central banks in China and Japan interrupted the dollar's rally, while investors awaited U.S. inflation data that could impact future Federal Reserve rate hikes.
European and Asian stocks rally on hopes of central banks ending rate rises and positive data indicating a potential rebound in China's economy.
China's stock market has slumped due to worrying economic data including falling prices, missed expectations in retail sales and industrial production, and plunging real estate investment, leading analysts to express concerns about an impending downward spiral in the Chinese economy.
UBS Investment Bank suggests that the stock slump in China is almost over and investors should be more optimistic about the market outlook, as economic fundamentals have improved and technical signals indicate a potential market rebound.
Hong Kong stocks plummet as the Federal Reserve's more hawkish stance and the yuan's continued weakness take a toll on the market.