The Hang Seng Index rose 2.1 per cent to 17,651.15 at the close, its highest level since November 23, with the 8.8 per cent rally since Monday driving the benchmark for its best week since October 2011. The Hang Seng Tech Index surged 4.6 per cent.
The Shanghai Composite Index added 1.2 per cent, as overseas investors bought a record 22.4 billion yuan (US$3.1 billion) of yuan-denominated stocks through the exchange link programme with Hong Kong.
CNOOC, China’s biggest offshore oil producer, jumped 3.6 per cent to HK$19.68 after registering a 24 per cent rise in first quarter earnings from a year ago, in the latest signs that corporate earnings are recovering.
“We have fine-tuned our numbers following the strong first quarter factoring in better margins,” said Pei Hwa Ho, an analyst at DBS. “Coupled with its steady growth strategy and superior execution, CNOOC is highly regarded as one of the best oil price proxies. We believe the rally, fuelled by optimism over China’s SOE revaluation and rising oil prices, has further to run, particularly with ongoing geopolitical tensions.”
Earlier in the week, better-than-estimated earnings from Hong Kong Exchanges and Clearing and Ping An Insurance added a dose of optimism to the market.
Sentiment in tech stocks turned positive after stellar earnings from Microsoft and Google’s parent Alphabet. That partly offset gloom from data that showed slower-than-expected economic growth and an inflation flare-up.
Tencent, the world’s largest video games company, jumped 2.7 per cent to HK$348.40, topping the volumes table while food delivery giant Meituan surged 3.7 per cent to HK$115.60 in heavy trade.
The Hang Seng Index is the best performer among the key stock gauges globally this month with a 6.7 per cent gain. The turnaround came after a guideline document by China’s State Council urged reforms to boost the appeal of the capital market and the mainland’s securities watchdog pledged more support through strengthening the links with the onshore market.
“These reform measures are conducive to the high-quality development of the equity market and for boosting the valuations of stocks as a whole,” said Yu Xiao, an analyst Yongxing Securities. “For stock picks, we still recommend those companies with strong cash flows and tech names with government policy support.”
Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 0.8 per cent and South Korea’s Kospi rose 1.1 per cent, while Australia’s S&P/ASX 200 lost 1.4 per cent.