Live news: Hong Kong equities surge on rally in Chinese stocks

Hong Kong, May 16, 2024 — Hong Kong stocks have witnessed a remarkable surge this week, outperforming major global equity indices. The rally has been fueled by several key factors:

1. Record Foreign Fund Purchases: Foreign funds poured a record 22.4 billion yuan ($3 billion) into Chinese stocks through a trading link, boosting investor confidence and contributing to the rally.

2. Improved Sentiment: China’s economy and earnings growth have improved, leading to cautious optimism about the world’s second-largest stock market. After years of underperformance, Hong Kong gauges are now performing exceptionally well.

3. Rebalancing Away from US Stocks: Global funds appear to be rebalancing away from overvalued US stocks, redirecting their attention to undervalued stocks in Hong Kong.

4. Top Performers: The Hang Seng Tech Index leads the charge with a 13% gain, while the city’s benchmark gauge has advanced nearly 9%, marking its best performance since late 2011.

5. Reasons for Inflows: Analysts attribute the sudden inflows to Chinese investors diversifying out of a weakening yuan, regulatory efforts to improve fund flows into Hong Kong, and increased interest in Hong Kong-listed tech firms.

Investors are closely monitoring this dynamic market, which has regained its spotlight. As global asset allocation shifts, Hong Kong equities continue to attract attention. 🚀📈