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Hong Kong stocks erase losses on report China to ease financing curbs on developers despite inflation risks
- Stocks erased losses sparked by a report showing producer prices in China surged at the fastest pace in 26 years while consumer inflation accelerated
- Tencent advanced before a report showing earnings rose 3 per cent last quarter, while BYD led carmakers lower
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Zhang Shidongin Shanghai
Hong Kong stocks advanced as Country Garden led gains among developers on speculation Beijing will ease funding restrictions to help stem debt defaults. The rally overturned earlier losses following a report showing inflation accelerated in China last month.
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The Hang Seng Index climbed 0.7 per cent to 24,996.14 at the close on Wednesday, after losing as much as 1.3 per cent. The Hang Seng Tech Index jumped 2.1 per cent while China’s Shanghai Composite Index slipped 0.4 per cent.
Chinese developers accounted for the four biggest index gainers after the state-run Securities Times said policymakers will loosen curbs on real-estate companies to sell bonds in the interbank market. That would be a relief to indebted developers reeling from a liquidity squeeze since China introduced the “three red lines” rules to stem excessive leverage in the industry.
“We expect the mortgage rates to peak gradually and the property market to get back on their feet in the post-pandemic era,” said He Miannan, an analyst at Everbright Securities. “Big industry players have stable earnings growth and high dividend yields and they are very attractive to big funds.”
Stocks had earlier slumped after China said producer prices surged 13.5 per cent in October from a year earlier, the fastest pace in 26 years. Consumer inflation quickened to 1.5 per cent, a level not seen since September 2020, it added on Wednesday.
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