Hong Kong stocks halt 3-day decline on plan to reinvigorate IPOs, earnings outlook

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Chinese benchmarks fluctuate after an underwhelming briefing by housing ministry, where few incremental policies on boosting home demand were announced

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Hong Kong stocks rose for the first time in three days after the city unveiled plans to boost IPOs. Photo: EPA-EFE

Zhang Shidongin Shanghai

Published: 10:37am, 17 Oct 2024Updated: 12:24pm, 17 Oct 2024

Hong Kong stocks rose, set to snap a three-day run of losses, as the city pledged to boost the appeal of its capital market and amid signs that the outlook for corporate earnings is improving.

The Hang Seng Index climbed 0.9 per cent to 20,460.86 at the noon break, paring gains of as much as 2.5 per cent after an underwhelming briefing by China’s housing ministry. The benchmark has fallen 4.5 per cent over the past three days. The Hang Seng Tech Index advanced 1.4 per cent.

Mainland China’s benchmarks fluctuated between gains and losses, with the CSI 300 Index and the Shanghai Composite Index both adding 0.1 per cent.

“The rebound in stocks can be expected, given the combination of China’s policy support, the backdrop of the rate cut in the US and still attractive valuations,” said Xue Jun, an analyst at Orient Securities in Shanghai. “Going forward, the focus will shift to corporate earnings, with the season for third-quarter results about to kick off.”

Sentiment was buoyed after Hong Kong’s Chief Executive John Lee Ka-chiu said in his third policy address on Wednesday that approvals for new share sales would be streamlined to give applicants more transparency on the timing of offerings. Lee also said that the financial hub will raise the borrowing limit for homebuyers and slash duties on imported liquor as part of a drive to revive economic growth.

The Hang Seng Index has erased about a third of the more than 30 per cent gains made since mid-September, as investors await further details on China’s fiscal stimulus after a finance ministry briefing failed to reveal specific spending over the weekend. Concerns have also emerged that the gains in stocks have been too fast and have overshot fundamentals.