Banks Buoy China Stocks as Honk Kong Surges on Tencent


Banks Buoy China Stocks as Honk Kong Surges on Tencent

China shares jumped on Tuesday as stocks in the banking sector rebounded on stimulus hopes, sending the CSI300 banking sub-index to a seven-week peak.

Hong Kong stocks steadied on Tuesday buoyed by Index high flyer Tencent Holdings Ltd, whose recent instability has had a bearing on Hang Seng’s overall performance.

The CSI300 measure of the largest Shanghai and Shenzhen A-stock listings was high 1.7% by midday. The Shanghai Composite Index stood 1.3% higher at 2,086.39 by the same time.

The Hang Seng Index rose 0.9% at 22,574.3 points. The China Enterprise Index of top mainland firms listed in Hong Kong was up 1.5%.

Speaking to Reuters, analyst Du Changchun of Northeast Securities in Shanghai said that the Chinese banking sector has been undervalued and stands a better chance of increasing earnings. He added that the sector had recently raked in better-than-expected earnings.

Industrial Bank Co Ltd jumped 4.3% as China Minsheng Banking Corp Ltd advanced 2.8%. Ping An bank Co Ltd surged 2.7%.

Tencent added 2.7%, picking itself up after falling 4.5% on Monday to a low last recorded 10 weeks ago.


The shares have been very unstable over the past 10 weeks, experiencing 11 daily losses or gains above 4% since January 24 as investors remained concerned that the entire sector was overvalued.

China’s financial sub-index climbed 2.2% to a record intraday high since February 20 on anticipation that the government will come up with policies to stabilize the economy, analysts said.

“There’s speculation the government will introduce some measures to stabilize growth as the market expects March data to be poor,” strategist Wang Weijun of Shanghai-based Zheshang Securities Co. told Bloomberg.

In the meantime, Great Wall Motor Ltd advanced 6.2% on media reports that Malaysia would award the firm a license to establish a vehicle assembly factory in the country.

To contact the reporter of the story: Jonathan Millet at