Hang Seng Index hits high as Tencent share price rises

The index closed on an eight-month high on Monday, amid improved market sentiment.

Hong Kong’s financial markets received a lift on Monday, 14 January, led by the Hang Seng Index, amid growing anticipation surrounding the Sino-American trade deal signing.

The stock indicator had closed at 28,954.94 – its highest finishing since May 2019 – boosted by share price jumps of China Construction Bank, Ping An Insurance Group, and Tencent Holdings at 1.2%, 2.6%, and 1.5% respectively.

Comparatively, the Shanghai Composite Index over on the mainland gained 0.76% for the day.

Fund managers and investors across Asia markets have been reacting to new updates that China will reportedly buy an estimated US$200 billion worth of American exports over the next two years, as part of the phase one trade deal, due to be signed on Wednesday (15 January) in Washington D.C.

BYD, Chow Tai Fook, and Tencent shares soar

In terms of equities, the day’s largest gains were made by Chinese electric vehicle maker Byd Co Limited, which soared nearly 16% from Friday’s close, after Chinese officials indicated that they will not enact subsidy cuts for new energy vehicles this year. On Monday, the company also appointed a former General Motors exec as senior chair adviser.

Hong Kong-founded jewellery conglomerate Chow Tai Fook Jewellery Group saw share price rise 3.1% on Monday’s market after it reported Q3 same-store sales growth of two percent for mainland China.

The Hang Seng’s largest listing – Chinese internet group Tencent Holdings Limited – traded at an 18-month peak of US$400.80 per share by Monday afternoon, before closing above US$405.

‘Triple-short covering’ keeping equities up

One reason why the equity market continues to fare well is because of a ‘triple-short covering’ that is lifting stock prices higher, according to Jefferies Financial Group strategist Sean Darby.

Improved sentiment toward the Chinese yuan, interest rates, and initial public offerings have forced investors to cover any short positions, he wrote in a note.

‘While domestic political issues are still present, the shift in currency and interest-rate markets is overwhelming any pessimism over the economy,’ wrote Darby.

On Monday night, the US Treasury also removed the ‘currency manipulator’ label that it had placed on China last August. This immediately pushed the Hang Seng Index up 0.32%.

Chinese officials are in the US capital this week to sign the phase one trade deal.

Learn how to take advantage of rising and falling stock prices with an IG demo account today.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.