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Property, tech stocks lift Hang Seng as China vows to maintain a healthy real estate market amid distress signs

  • Oil stocks prospered amid a global energy shortage as Brent crude surpassed US$80 a barrel
  • Country Garden, Alibaba and Meituan led top winners while China Evergrande also benefited from better sentiment

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China’s central bank pledges to maintain a healthy property market in a signal it’s prepared to contain any fallout from the Evergrande debt crisis. Photo: AFP
Cheryl HengandIris Ouyang
Hong Kong stocks rose for the second day, buoyed by a rally in real estate developers, after China’s central bank pledged to ensure a healthy property market amid concerns about the fallout from Evergrande’s liquidity crunch.
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The Hang Seng Index rose 1.2 per cent to 24,500.39 at the close of Tuesday trading. The Hang Seng Tech index jumped 2.1 per cent while the Shanghai Composite Index climbed 0.5 per cent.

Longfor Group appreciated 7 per cent, while Country Garden and China Resources Land climbed more than 4 per cent. Sunac China surged about 15 per cent.

The People’s Bank of China said it will sustain a healthy development of the real estate market and consumers’ rights at its third-quarterly meeting on Monday. The statement suggests policymakers are prepared to prevent any contagion in the industry amid signs of distress among highly indebted developers.

“While evolving events [at Evergrande] could prompt further bouts of volatility, we don’t see a broad systemic risk that would cause investors to underweight China, or equities more widely,” UBS Wealth Management said in a report. “We advise caution only in affected sectors like Chinese property and financials.”

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China Evergrande added 4.7 per cent to HK$2.67. Hong Kong-based developer Chinese Estates Holdings sold about 131 million shares in the indebted builder on Monday at an average price of HK$2.6845, according to an exchange filing, trimming its stake to 4.7 per cent.

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