HSBC, Xpeng, SMIC power Hong Kong stocks to 8-week high before China GDP data

China’s economic recovery likely strengthened last quarter while manufacturing and retail sales advanced in March, official reports this week may show

Stocks climbed by the most since a 2.1 per cent jump om March 29, with Xpeng leading a charge among EV makers

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A long exposure photo shows people looking at cars on display during the Shanghai auto show in 2021. Photo: EPA-EFE

Published: 10:47am, 17 Apr 2023Updated: 4:55pm, 17 Apr 2023

Hong Kong stocks jumped to the highest level in eight weeks high before government reports this week signalling China’s economy strengthened last quarter after reopening, while manufacturing and retail sales expanded. Electric-car makers surged.

The Hang Seng Index advanced 1.7 per cent to 20,782.45 at the close of Monday trading, the most since a 2.1 per cent gain on March 29. The Tech Index rose 2.2 per cent while the Shanghai Composite Index appreciated 1.4 per cent.

HSBC climbed 2.5 per cent to HK$57, Alibaba Group added 1.3 per cent to HK$95.75 amid an internal reorganisation and Tencent gained 1.9 per cent to HK$372.40. China’s top chip maker SMIC rose 3.1 per cent to HK$24.65. Chi na Mobile, the world’s biggest phone carrier by subscribers, gained 3.4 per cent to HK$69.25.

Xpeng led EV makers higher, soaring 12.5 per cent to HK$44, while BYD rose 1.7 per cent to HK$230.60 and Nio rallied 6.2 per cent to HK$76.30. There are expectations carmakers will unveil newer models at the Shanghai Auto show, which kicks off on Tuesday, to fuel sales.

China’s reopening “provides “a significant boost for equities within the broader market,” said Marty Dropkin, head of equities Asia-Pacific at Fidelity International. “Regional earnings for 2023 remain encouraging compared to global markets.”

China’s economy likely expanded 4 per cent in the first quarter, according to economists tracked by Bloomberg before a government report on Tuesday, versus 2.9 per cent in the final quarter of 2022. China set an official annual target of about 5 per cent during the two sessions in March.