Hong Kong Market rises 1.6%

Hong Kong share market finished session higher on Thursday, 09 February 2023, as investors chased for value buying, after Fitch Ratings and investment banking houses raised its China growth forecast for 2023.

At closing bell, the benchmark Hang Seng Index advanced 340.84 points, or 1.6%, to 21,624.36. The Hang Seng China Enterprises Index was up 124.44 points, or 1.73%, to 7,313.73.

Market sentiment improved as Fitch Ratings raised its China growth forecast for this year, citing evidence that consumption activity is recovering faster than initially expected after zero-Covid was abruptly abandoned. It now expects growth of 5% in 2023, compared with an earlier estimate of 4.1%. The recovery will be primarily consumption-led, it said, as households re-engage in activities previously hampered by health controls. Consumption contributed just 1 percentage point to growth last year, compared with a pre-pandemic average of around 4 percentage points, it said.

China's ongoing reopening would provide boosts to global growth, inflation, and China-exposed assets, Goldman Sachs said in a note on Wednesday. There is more upside for China equities from here even after the recent sharp rally, they added.

China's economic reopening is well under way and policies are aligned to boost growth, Morgan Stanley said on Wednesday. The supportive business environment is likely to continue to prevail as policymakers will prop up the economy to maintain social stability, they added.

Among blue chips, Alibaba Group jumped 4% to HK$107.60 after the company said it was testing a ChatGPT-style chatbot, joining a growing bandwagon. Tencent added 3.5% to HK$395.60, and smartphone maker Xiaomi surged 8.5% to HK$13.52. Developer Longfor Group gained 3% to HK$25.70, and casino operator Sands China jumped 5.3% to HK$29.50.

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