Beijing: Hong Kong stocks increased as major corporate insiders withdrew and mainland China funds supported the market by investing in big-cap tech companies. US price increases that have slowed have raised hopes that the Federal Reserve will soon scale back or stop raising interest rates.
At 3pm local time, the Hang Seng Index increased 0.4% to 20,434.25 and posted a weekly gain of 0.5%. While the Shanghai Composite Index increased by 0.6%, the Tech Index fell 0.1%.
Tencent and Alibaba Group both increased by 0.3% to HK$364.40 and HK$94.45, respectively, stopping this week's sell-off. BYD, a manufacturer of electric vehicles, increased 2.2% to HK$227, and rival Geely Auto increased 4.3% to HK$10.18. WuXi Biologics increased 1.8% to HK$54.80, while HSBC increased by 0.9% to HK$55.75.
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Through the Stock Connect, mainland funds purchased shares of Hong Kong-listed companies for HK$3 billion (US$380 million) on Friday, bringing the total inflows this week to HK$6 billion. They have spent more than $10 billion in ten straight weeks as net buyers.
The top targets included China Mobile, WuXi Biologics, and CNOOC. In Friday trading, they increased by 0.5%, 1.2%, and 0.8%, respectively.
"The economic momentum in Asia, in China looks more optimistic than other regions, and central banks across Asia, and in the US, are nearly done with interest rate raising," said Tai Hui, a strategist at JPMorgan Asset Management in Hong Kong. He advises buying stocks in the tech and tourism industries.
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US producer prices unexpectedly decreased 0.5% last month, according to data released on Thursday by the Labour Department. This came after a government report on Wednesday that showed consumer prices increased by 5% annually in March, slowing from a 6% pace in February.
The odds of the Fed raising its benchmark rate by 25 basis points on May 3 have decreased as a result of the two inflation reports, but traders still expect it to happen.
"Global liquidity and risk appetite are the fundamentals for Hong Kong stocks," Sealand Securities analyst Dang Chongyu wrote in a note on Friday. "The change in US monetary policy will help the market in the city."
After reaching a high of HK$36.50 on its Hong Kong listing debut, Lufax Holdings traded at HK$34.50 at noon. The American depositary shares of the Chinese online lender reached US$2.05 overnight in after-hours trading in New York, which is equal to HK$32.19. In Hong Kong, two of them correspond to one common share.
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Asian markets in general advanced. The S&P/ASX 200 in Australia increased by 0.5%, the Kospi in South Korea increased by 0.4%, and the Nikkei 225 in Japan increased by 1.2%.
