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Hong Kong stocks post best month in six as upbeat data boosts recovery hope – business news

Hong Kong stocks firmed on Tuesday to post their best month in six, as upbeat U.S. and Chinese data renewed hopes for economic recovery and offset worries about U.S. sanctions against the city over Beijing’s national security law.

At the close of trade, the Hang Seng index was up 125.91 points or 0.52% at 24,427.19. The Hang Seng China Enterprises index rose 0.01% to 9,758.63.

Hong Kong stock market will be closed on Wednesday for Hong Kong Special Administrative Region Establishment Day.

For the month, HSI gained 6.4%, its best one since December 2019, while HSCE rose 2.1%.

Washington moved to suspend Hong Kong’s preferential treatment under the U.S. law, punishing China, which on Tuesday passed national legislation for the former British colony. Pro-democracy activists and some western governments say the law will erode Hong Kong’s high degree of freedom.

“What matters most importantly is stability, the notion that the year forward might have less social unrest than the year passed,” Eric Moffett, portfolio manager at T. Rowe Price, told a media call, adding that cheap valuations are also supportive of the Hong Kong stock market.

Investors cheered overnight Wall Street gains on strong U.S. housing data, as well as China’s announcement of a cross-border wealth management scheme linking Hong Kong, Macau, and their neighbouring cities on the mainland.

The sentiment was also boosted by data showing China’s manufacturing sector grew more than expected in June. The official manufacturing Purchasing Manager’s Index (PMI) came in at 50.9 in June, compared with May’s 50.6.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.69%, while Japan’s Nikkei index closed up 1.33%.

The yuan was quoted at 7.0714 per U.S. dollar at 08:14 GMT, 0.12% firmer than the previous close of 7.08.

At close, China’s A-shares were trading at a premium of 28.57% over Hong Kong-listed H-shares.

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