Hong Kong stocks rebound after flirting with correction levels

Bloomberg

Hong Kong’s stocks climbed on Monday, with a rally in beaten-down property and technology names helping the benchmark index rebound from the brink of a technical correction.
The Hang Seng Index jumped 2.7%, snapping a five-day loss. Country Garden Holdings Co. — China’s largest builder — was among the top gainers following a report that the nation’s banking regulator urged lenders to support the real estate sector amid a growing mortgage boycott. A gauge of tech shares closed 3% higher.
“The property sector is too big to fail for the Chinese economy and officials seem to be trying their best to comfort the market and home owners,” said Dickie Wong, executive director of research at Kingston Securities Ltd. “And tech shares are at cheap valuations.”
The rebound followed a heavy slump in China and Hong Kong shares that’s sown fresh doubts about whether a bottom has yet to be seen for market. Renewed concerns over the ailing property sector and doubts over Beijing’s stance on tech regulation had sent stocks on a downward spiral after a stellar June.
The Hang Seng Index plunged 6.6% last week, the most since March 2020, taking losses from a June 28 high to almost 10% and putting the gauge on track for a technical correction.
China’s benchmark CSI 300 Index gained 1% in Monday’s session after losing 4.1% last week. Stocks have been falling again after a two-month rally that braved a global equities slump, with Hong Kong as well as parts of mainland China witnessing a surge in Covid-19 cases.
The rebound in stocks listed on the mainland and last week’s “heavy correction” in Hong Kong shares have attracted investors to buy on dips, said Banny Lam, head of research at CEB International Investment Corp.