Hong Kong stocks flat after hitting 8-month highs as mainland China markets reopen

Hong Kong stocks were flat after hitting an eight-month high on Monday as mainland China traders returned from a five-day holiday break. The mood was upbeat as a slew of investment banks made positive calls on the world’s second largest stock market amid expectations of more policy support from Beijing.

The Hang Seng Index was trading in a narrow band and was at 18,477.99 at 10:30, almost unchanged after hitting its highest since September 5. The Tech Index added 0.2 per cent while the Shanghai Composite Index advanced 0.9 per cent after a five-day local holiday.

Tencent jumped 0.6 per cent to HK$366.60, gaming firm NetEase added 1.8 per cent to HK$159.90, while EV maker Li Auto surged 5.9 per cent to HK$117.60. Online travel agency Trip.com advanced 2.3 per cent to HK$411.80.

Before today’s gain, the city’s benchmark index has advanced for nine trading days to register the longest winning streak since 2018 as China’s supportive policy stance and cheap valuations lured global investors. The rally brought the gains since the January low to over 20 per cent and pushed the local market into a bull market.

“A rally in Hong Kong and Chinese stocks could continue in the near term” as a change in global markets narrative looks likely while Beijing rekindles hope for local markets, Nomura analysts including Chetan Seth said in a note on Monday. Still, a follow-through on policies is critical to sustain momentum, they added.

Global investment banks Goldman Sachs, UBS and BNP have become more positive on stocks in China and foreign investors loaded up on Chinese stocks for a third straight month in April when China’s State Council, or cabinet, issued a nine-point guideline last month to prop up the US$9 trillion stock market.

Other major Asian markets were mixed. The Nikkei 225 in Japan and the Kospi in South Korea declined by 0.1 to 0.2 per cent, while the S&P ASX 200 Index jumped by 0.6 per cent, while

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