Hong Kong stocks rise after US and European stocks

Hong Kong tech stocks rose on Monday to continue a rally of the past week after Beijing signaled it would intervene to prop up the market.

The Hang Seng Tech Index rose, paring steep early gains to a 0.8 percent gain in the morning session. The trains followed a Chinese market rally last week, after Beijing announced it would introduce “favorable” measures to support the economy and financial markets.

Chinese real estate shares listed in Hong Kong lost up to 3.7 percent in early trading afterwards Evergrande, the country’s most indebted developer, halted trading in its shares. Trading in the company’s electric vehicle and real estate services units has also been suspended.

The Hang Seng index rose 1.9 percent in morning trade but later stumbled up just 0.6 percent. Utilities were the biggest gainers, with gas utility ENN Holdings up 24 percent.

Elsewhere in Asia, China CSI300 was flat after gaining 0.4 percent, Australia’s S&P/ASX 200 gained as much as 0.8 percent and South Korea’s Kospi fell as much as 0.4 percent. Markets in Japan were closed for a holiday.

“We have seen exceptional moves in MSCI China over the past few days as global investors reassess their appetite for equity exposure to the world’s second largest economy,” analysts at Nomura said.

They added that negativity for the first half of the week was driven by geopolitics, with traders concerned about China’s perceived support for Russia in its war against Ukraine.

Chinese stocks have also been hit by new Covid-19 restrictions imposed to tackle the country’s biggest outbreak since 2020 and concerns over the direction of Xi Jinping’s “shared prosperity” efforts, they added.

However, analysts at Westpac noted that recent restrictions appear to be curbing infections quickly. “From the late 2021 GDP stimulus and February activity data, it can be concluded that the net economic impact of the authorities’ zero Covid-19 approach is declining,” they said.

Monday’s moves came after European stocks losses incurred since Russia invaded Ukraine last month, with indices on both sides of the Atlantic marking their biggest weekly gains since November 2020.

Aluminum prices rose after mining giant Rio Tinto announced it would ban alumina exports to Russia, with contracts up 3.1 percent in Shanghai on Monday and 4.8 percent on the London Metal Exchange . according to Reuters.

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