Optimism on Chinese economy leads Hong Kong stocks higer

Hong Kong's benchmark equity index rose on Tuesday as stronger Chinese home price data signalled that the world's second-largest economy could be stabilising, following attempts by Beijing to put a floor under slowing growth.

The Hang Seng index gained 319.15 points or 1.07 per cent to 30,129.87. The Hang Seng China Enterprises index rose 1.63 per cent to 11,821.18. The sub-index of the Hang Seng tracking energy shares rose 0.6 per cent, while the IT sector added 1.18 per cent, the financial sector ended 1.96 per cent higher and the property sector dipped 0.43 per cent.

Average new home prices in China's 70 major cities rose 10.6 per cent in March on an annual basis, the highest since April 2017, and up from a 10.4 per cent gain in February, according to Reuters calculations using data released by the National Bureau of Statistics (NBS) on Tuesday.

Stronger housing prices are seen as adding to hopes for positive economic data on Wednesday when China is due to release its first-quarter gross domestic product data. China's first-quarter economic growth likely slowed to its weakest pace in at least 27 years, according to a Reuters poll, but stimulus measures are expected to set the stage for a recovery. But while China's stimulus measures are likely to shore up economic growth this year and next, they may undermine the country's drive to control debt and worsen structural distortions over the medium term, the OECD said in a report on Tuesday.

The top gainer on the Hang Seng was China Construction Bank Corp, which rose 3.91 per cent, while the biggest loser was Sunny Optical Technology Group Co Ltd, which fell 2.38 per cent. China's main Shanghai Composite index closed up 2.39 per cent at 3,253.60, its highest close since March 22, 2018, while the blue-chip CSI300 index ended up 2.77 per cent.

Around the region, MSCI's Asia ex-Japan stock index gained 0.41 per cent, while Japan's Nikkei index closed up 0.24 per cent. The yuan was quoted at 6.7076 per U.S. dollar at 08:27 GMT, 0.01 per cent firmer than the previous close of 6.7085. The top gainers among H-shares were China Construction Bank Corp up 3.91 per cent, followed by Industrial and Commercial Bank of China Ltd, up 3.08 per cent and China Life Insurance Co Ltd, up 3.07 per cent.

The three biggest H-shares percentage decliners were Dongfeng Motor Group Co Ltd, down 2.05 per cent, Great Wall Motor Co Ltd, which fell 1.7 per cent and Air China Ltd, 1.6 per cent lower.