Investing.com– Hong Kong’s benchmark stock index rose sharply on Monday and was close to entering a bull market, as it marked an extended recovery from over five-year lows hit at the beginning of the year.
The index rose 1.5% to 17,916.0 points by 23:47 ET (03:47 GMT), and was at a five-month high. The index was trading up more than 20% from lows hit around mid-January, with a close at current levels confirming a bull market.
A bull market is formed when a stock or index closes 20% above a recent low. In the Hang Seng’s case, it had tumbled to an over five-year low in mid-Jan.
Gains were driven chiefly by technology and property stocks on Monday. Sentiment towards tech was boosted by positive earnings from U.S. tech giants Microsoft Corporation (NASDAQ:) and Alphabet Inc (NASDAQ:), which ramped up hopes that demand for artificial intelligence will buoy tech valuations in the coming months.
Property stocks rallied after the Chinese government loosened house buying restrictions across several major cities, as it moved to further support the beleaguered property sector.
Some positive earnings also aided sentiment. Insurer AIA Group Ltd (HK:) rallied as much as 10% after clocking stronger first-quarter earnings and adding $2 billion to a plan to buy back stocks.
The Hang Seng has been on an uptrend over the past 10 days, amid growing hopes over an economic recovery in China and more stimulus measures from Beijing.
But local stocks still remain vulnerable to any negative signals on Chinese growth, or regulatory tussles with the U.S.
remove ads
.
While the Hang Seng was up 6.5% so far in 2024, it was still nursing a steep decline over the past three years, as an economic recovery in China sputtered. This helped enable some measure of bargain buying into local stocks.
But foreign capital inflows had also largely dwindled in recent years, amid persistent concerns over an economic slowdown in China. Hong Kong still remains a major staging point for forays into mainland China.
