China’s stocks extend gains as shares linked to Greater Bay Area surge on development plan

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Shares of port operators and property developers jump over Greater Bay Area plan

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Chinese investors look at prices of shares (red for price rising and green for price falling) at a stock brokerage house in Qingdao city, east China's Shandong province, on November 27, 2015. Photo: Imaginechina

Zhang Shidongin Shanghai

Published: 10:39am, 19 Feb 2019Updated: 4:36pm, 19 Feb 2019

China’s stocks rose for a second day, with the benchmark gauge extending the biggest gain in three months, on optimism that growth in the world’s second-largest economy will gather pace. Hong Kong’s stocks dropped as HSBC Holdings reported lower-than-expected earnings.

The Shanghai Composite Index added 0.1 per cent, or 1.29 points, to 2,755.65 at the close on Tuesday. The Hang Seng Index slid 0.4 per cent, or 118.88 points, to 28,228.13.

Guangzhou Pearl River Industrial Development and Guangzhou Port led the gains among companies based in the southern province of Guangdong after Beijing unveiled a long-heralded plan to create the Greater Bay Area by linking Hong Kong and Macau with cities in Guangdong.

Hong Kong’s banking and insurance sectors among biggest winners under ‘Greater Bay Area’ blueprint, say analysts

“Investors had very low expectations about the economy at the start of the year,” said Wu Kan, an investment manager at Soochow Securities in Shanghai. “But they’ve got lots of supportive measures recently including the record amount of new loans. So the confidence is back now. The market looks a bit stretched now after the nice run-up. The rally will continue after some consolidation.”

The mainland’s equity gauge jumped 2.7 per cent on Monday after banks’ new loans surged to a record in January and off-the-balance-sheet lending reversed declines, raising expectations that economic growth will pick up on increasing financing demand.