Hang Seng Soars, But There Are Dark Clouds from the US
The Hang Seng Index surged 377 points (+1.4%) to close at 26,608 on Monday, extending gains from the previous session. The gains were broad-based, indicating that risk appetite in the Hong Kong market remained strong at the start of the week.
The main driver of the rally came from technology stocks, with the sector index surging 3.1%. Consumer and property stocks then turned to lift the index, indicating a fairly even buying rotation.
Positive sentiment was also supported by the Shanghai Composite Index, which hit its highest level in a decade. The strong performance of the mainland Chinese market provided psychological support that China's start to the year remained solid and hadn't lost momentum.
On the macro front, concerns about deflation in China were said to have eased in December. This reinforced hopes that price and demand conditions were stabilizing, while opening the door for more aggressive policies to keep the recovery going.
Market expectations were also growing that Beijing would increase support measures to stimulate demand and the supply side. These hopes for further stimulus brightened the outlook for corporate earnings—and provided additional fuel for the rally.
However, the upward momentum was not entirely unimpeded. The market held back after US futures fell sharply, triggered by issues related to the Fed and Powell, which made global sentiment more sensitive, especially in the risk sector.
Investors are also beginning to adopt a cautious stance ahead of this week's release of key Chinese data, including December trade data and fourth-quarter GDP, which could determine whether this strong trend can continue or be "corrected" by economic figures.
Stocks that stood out: Meituan (+6.3%), JD Health (+4.8%), Xiaomi (+2.2%), Tencent (+1.9%), and Zijin Gold Intl (+1.5%).
Source: Newsmaker.id
