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Hong Kong's benchmark Hang Seng index posted its biggest daily gain in more than two months on Monday, as investors bet that more infrastructure spending and policy stimulus will re-energise China’s cooling economy.
The Hong Kong China Enterprises Index, which tracks Chinese companies listed in Hong Kong in the form of so-called ‘H shares’, surged 3.4 per cent, its biggest daily gain this year.
Chinese regulators had said on Friday that it would let mainland mutual funds invest in Hong Kong shares via the Shanghai-Hong Kong Stock Connect scheme.
Shares rose after Beijing unveiled details of its ambitious ‘new Silk Road’ initiative to improve links from Asia to Europe and Africa, which analysts expect would trigger a wave of investment.
Also boosting shares were dovish comments from central bank Governor Zhou Xiaochuan at the week-end that reinforced expectations for further monetary easing.
The Hang Seng index rose 1.5 per cent to 24,855.12, while the China Enterprises Index gained 3.4 per cent to 12,306.56 points.
The HIS’s gain was the biggest since January 21.
Among the most actively traded stocks on Hong Kong’s main board were SMIC, up 5.6 per cent at HK$0.75; Bank of China, up 3.2 per cent at HK$4.46; and China Mining, up 9.7 per cent at HK$0.17.
Total trading volume of companies included in the HSI index was 2.7 billion shares.
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