Hong Kong stocks rocket to extend surge
Hong Kong stocks soared more than 6% at the start of trade Thursday morning, extending the previous day's 9% gain.
Hong Kong stocks rose 9% on Thursday, extending the previous day's rise, as investors re-entered the market following China's commitment to supporting it.
By the break, the Hang Seng Index had risen 5.79% or 1,163.47 points to 21,250.97.
Shanghai Composite Index
The Shanghai Composite Index gained 2.59% or 82.25 points to 3,252.96, while the Shenzhen Composite Index gained 3.56% or 74.25 points to 2,160.50 on China's second market.
Investor confidence skyrocketed on Wednesday as Chinese authorities stated they will maintain capital market stability and implement risk-management measures for distressed property developers.
Hang Seng Tech Index
The Hang Seng Tech Index rose more than 10% on Thursday, following a record gain of more than 20% the day before.
And market heavyweights in the technology sector expanded on their rapid gains, with Alibaba, Tencent, JD.com, XD Inc, and Meituan all up between 7% and 15%.
"In the short term, it's fund flow and liquidity that's driving up the whole market, on the back of such a cheap valuation level," said Kenny Wen, at Everbright Sun Hung Kai Co.
"But whether the market can keep rallying is really up to the regulatory environment and corporate earnings recovery story."
He added that "tech will keep recovering but it remains challenging for them to recover to the previous levels, given the shifted regulatory regime in general".
Troubled Evergrande was up over 20%, following an 11% increase on Wednesday, on prospects for government assistance as it struggles under a mountain of debt.
Thursday's bounce came on the heels of a good performance on Wall Street when an index of Chinese firms listed in the United States gained 33%.
The gains were also aided by Federal Reserve Chairman Jerome Powell's bullish view of the US economy after the bank raised interest rates by a quarter-point for the first time since 2018.
Powell said there was little chance of a recession in the next year and noted that it was "very strong and well-positioned to handle tighter monetary policy."
He told reporters after the rate hike, "We're not going to let high inflation become entrenched. The costs of that would be too high."
He added that the Fed was determined to utilize its "powerful tools" to prevent this and that a forecast of future hikes suggested that another six could be on the way before the end of the year.