Hong Kong stocks surge on China’s surprisingly strong July exports

Hong Kong stocks extended gains into a fourth day on Thursday, as a strong reading on China trade data bolstered hopes that the world’s second-largest economy would sustain growth momentum throughout the year.

The Hang Seng Index rose 0.5 per cent to 25,041.03 at the noon break, adding to an aggregate 1.6 per cent gain over the past three days. The Hang Seng Tech Index also rose by 0.5 per cent. On the mainland, the CSI 300 Index and the Shanghai Composite Index both added 0.1 per cent.

Alibaba Group Holding rallied 2.4 per cent to HK$119.50 and parcel delivery firm ZTO Express jumped 5 per cent to HK$164.40. Chipmaker Semiconductor Manufacturing International added 3 per cent to HK$54.20 and China Mobile lost 0.1 per cent to HK$85.50 before the disclosure of interim reports later on Thursday.

“China’s exports supported the economy strongly so far this year,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management in Hong Kong. “The government is on track to deliver the growth target of 5 per cent for the full year.”

Still, growth in overseas shipments could moderate in the coming month, as the effect of front-loading Chinese goods to avoid higher tariffs waned, according to Zhang. US President Donald Trump hinted at a higher tariff rate on China after imposing a punitive 25 per cent levy on India for purchasing oil from Russia.

Mainland exports increased 7.2 per cent from a year earlier in July, the customs office said on Thursday. That beat the 5.6 per cent estimate of economists polled by Bloomberg. Imports rose 4.1 per cent against a projection of a 1 per cent decline.

South China Morning Post