Stocks in Hong Kong jumped after China's market regulator suspended securities lending for restricted stocks listed on mainland exchanges to stabilize share prices, prompting a series of measures to stem a market decline. China Evergrande sank after losing a court case to stave off liquidation.
The Hang Seng index rose 0.8 percent to 16,077.24 on Monday, after rising as much as 1.9 percent. The benchmark rebounded 4.2 percent from a 15-month low last week. The Tech Index rose 0.5 percent, while the Shanghai Composite Index fell 0.9 percent.
Alibaba Group rose 2.4 percent to HK$72.60, e-commerce rival JD.com rose 2.2 percent to HK$93.35 and Baidu rose 2.1 percent to 105.10 HK$. China Unicom rose 2.4 percent to HK$5.45, Sinopec rose 2.5 percent to HK$4.16 and PetroChina rose 1.4 percent to HK$5.79.
Longfor rose 0.3 percent to HK$9.47 and China Resources Land rose 2.9 percent to HK$24.90 after the city of Guangzhou in southern Guangdong province lifted restrictions on buying large houses .
“The market is still in a recovery phase driven by the recovery in sentiment,” Kevin Liu, strategist at CICC, said in a report on Sunday. “A real turnaround requires more targeted policy catalysts,” he added.
Hong Kong High Court orders Evergrande Group to be liquidated
Still, Hong Kong's stock benchmark index has fallen about 4.2 percent so far this month, heading for its worst January since the 6.7 percent decline in the first month of 2020. A court ruling that sent debt-ridden Chinese developer Evergrande into liquidation dampened stock gains.
China Evergrande fell 21 percent to HK$0.163. A Hong Kong court ordered the developer to close after it failed to provide a satisfactory plan to repay its creditors over the past 18 months. Its Evergrande New Energy Vehicle unit fell 18 percent to HK$0.229, while property management company Evergrande Property Services fell 2.5 percent to HK$0.39. Trading in all of them stopped shortly after the verdict.
US lawmakers want to ban Chinese biotech companies from contracts with military ties
WuXi Biologics pared gains and fell 5.7 percent to HK$23.15, extending its 17 percent decline on Friday. The company denied allegations in a U.S. bill that its CEO Chen Zhisheng had ties to the Chinese military. Its sister company WuXi Apptec, which is also targeted in the bill, plunged nearly 11 percent to HK$57.75.
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China's GDP: Beijing's long to-do list to boost its economy in 2024
China's GDP: Beijing's long to-do list to boost its economy in 2024
Sentiment is likely to be cautious ahead of further potentially weak economic data this week. China's manufacturing sector is expected to remain in contracting territory for a fourth month in January, economists tracked by Bloomberg said, ahead of an official report on January 31. Industrial profits fell 2.3 percent in 2023, the second year of decline, reported last week showed.
The Federal Reserve is expected to leave its key interest rate unchanged at its first policy meeting of the year later this week. This is evident from the odds calculated using Fed Fund futures contracts compiled by CME Group.
Key Asian markets traded higher. South Korea's Kospi rose 0.9 percent and Australia's S&P/ASX 200 rose 0.3 percent, while Japan's Nikkei 225 rose 0.8 percent.