Hang Seng Index soars 6.2% as Blackrock’s ‘overweight’ call fuels frenzy for China stocks

The Hang Seng Index jumped 6.2 per cent to 22,443.73 on Wednesday, the highest level since January 2023. The Tech Index surged 8.5 per cent. A gauge tracking US-listed Chinese stocks rallied 5.5 per cent in New York overnight. Financial markets in mainland China are closed this week for a holiday.

The Hang Seng Index’s 1,310-point gain today is the biggest single-day jump since March 2022. Trading volume totalled HK$434 billion, despite the Stock Connect scheme linking the market with onshore exchanges being closed.

In total, the city’s benchmark gauge has surged 23 per cent over the past six trading days after Beijing’s policy roll-out, making it the quickest bull run since 2008. More than US$770 billion in market value has been restored to the market, according to Bloomberg data.

All but five of the 82 index members jumped on Wednesday. Food delivery platform Meituan surged 14.7 per cent to HK$197.20, e-commerce platform operator JD.com advanced 10.7 per cent to HK$185.10 and search engine operator Baidu rallied 9 per cent to HK$115.20.

“We see room to turn modestly overweight [on] Chinese stocks in the near term” given their near-record discount to developed-market shares even with the recent surge, BlackRock strategists said in note on Tuesday. More fiscal stimulus may be coming and that will prompt investors to join in, they added.