Shares in Hong Kong posted their biggest daily gains this year following a call from China’s premier for “forceful” state support to halt a punishing market rout. The city’s benchmark Hang Seng index rose 2.6 per cent on Tuesday after Premier Li Qiang’s called for “more forceful and effective measures to stabilise the market and boost confidence”.
The Hang Seng fell almost 14 per cent last year, making it one of the worst-performing benchmark indices across all large markets. Stocks in Shanghai, Shenzhen and Hong Kong are continuing to lose ground as a result of slowing economic growth in China, an unresolved financial crisis in the property sector and worsening tensions between Beijing and Washington.
Traders said Li’s comments prompted a handful of global funds to begin to strategically buy up undervalued shares in Hong Kong, where shares are down about 10 per cent this year. But they added that the gains would prove fleeting if state support did not materialise.