Reversing the losses of Monday, Hong Kong stocks rose in tandem with the other Asian markets on encouraging economic data which has painted over, at least temporarily, worries about the fresh outbreak of the coronavirus pandemic.
The benchmark index of Hong Kong stocks gained 215 points, or 0.9 percent, in the morning, following a 580 points, or 2.3 percent, rise in New York overnight. Elsewhere in Asia, investors’ sentiment was boosted by a survey showing a quickening pace of activities in the Chinese mainland’s manufacturing sector.
China’s official purchasing managers’ index (PMI) for June released on Tuesday showed factory activity grew for the fourth straight months, according to a Reuters report. The mainland’s services sector PMI also expanded at a faster clip compared to the previous month.
Results of the survey have been taken by investors as a hopeful sign for the global economy at a time when a new wave of coronavirus outbreak has shaken confidence about the expected recovery from the pandemic. Analysts expect that markets will remain volatile in coming months as investors’ sentiment swings between hope and despair before an effective coronavirus vaccine is found.
As it is, there are no safe bets to be found in the market these days. Some analysts argued that technology stocks, especially the well-established industry leaders such as Apple, Amazon and Microsoft in the US and Alibaba and Tencent on the Chinese mainland, are less vulnerable to the fallout of the pandemic.
Apple’s latest budget phone, for instance, is reported to be selling well in all markets. Income from services, a major focus of the company’s business, may have even got a boost from the coronavirus lockdown.
In Hong Kong, property stocks are considered by some analysts to be oversold at their current low prices because of exaggerated concern about the impact of the national security law. Anecdotal evidence of people selling their homes in preparation for emigration is absurdly overblown.
The fact is home demand has remained strong while interest rates are low and credit is readily available.
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