Hong Kong Stocks Advance After Biggest Tumble This Year

Updated on
  • Geely Automobile surges more than 5% after sliding on Thursday
  • China’s H-share measure advances most in more than two weeks

Odyssey's von Pfeil Sees HK as Buying Opportunity

Hong Kong stocks rose, led by a rebound in shares that had driven a slump on Thursday.

The Hang Seng Index advanced 1.2% at the close as Industrial & Commercial Bank of China Ltd. and Ping An Insurance Group Co. climbed at least 2.7 percent. Geely Automobile Holdings Ltd. added 5.8 percent after slumping more than 7 percent a day earlier. Hong Kong’s benchmark equity gauge lost as much as 2.2 percent on Thursday, its biggest retreat since November, and closed 1.9 percent lower.

The turbulence broke a sense of bullish calm that’s prevailed throughout this year in Hong Kong’s stock market, with the benchmark index jumping 31 percent through Wednesday in Asia’s best performance. Previous bouts of weakness in 2017 have proved to be good opportunities to pick up stocks in Asia’s top-performing measure, with the gauge repeatedly bouncing off its 50-day moving average.

Traders attributed Thursday’s declines to concerns ranging from the risks of Chinese deleveraging to a surge in the city’s interbank rates. Adding to jitters -- on the 30th anniversary of the Black Monday stock market crash -- was People’s Bank of China Governor Zhou Xiaochuan warning about a possible "Minsky Moment," a plunge in asset values following unsustainable gains.

Derivatives also played a part, with Kenny Wen, a strategist at Sun Hung Kai Financial Ltd., saying the intraday termination of callable bull/bear contracts - a popular derivative in Hong Kong that allows investors to make leveraged bets -- exacerbated the decline.

The Hang Seng China Enterprises Index advanced 1.8 percent after sliding the most this year on a closing basis a day earlier.

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