Hong Kong Stocks Surge in Anticipation of Fiscal Stimulus; Li Auto and Geely Thrive on Robust EV Sales as Ping An Insurance Stumbles on Quarterly Results

Shares in Hong Kong ascend as investors await economic stimulus initiatives. Li Auto and Geely see an upswing due to higher than predicted electric vehicle sales, whereas Ping An Insurance experiences a downturn following underwhelming quarterly outcomes.

The Hang Seng Index saw a slight rise of 0.1 per cent, ending at 20,498.95 following a drop of up to 0.5 per cent earlier. Electric vehicle manufacturer Li Auto experienced a boost, thanks to strong industry sales figures highlighted by Citigroup. On the other hand, Ping An Insurance Group's stocks dipped after its quarterly earnings fell short of predictions made by analysts. The Hang Seng Tech Index also experienced growth, with an increase of 0.7 per cent.

The primary indexes of Mainland China also saw an upward trend. The CSI 300 Index rose by 0.6 per cent, and the Shanghai Composite Index increased by 0.5 per cent.

Market participants are anticipating economic incentives from Beijing, which would supplement the monetary relaxations already introduced through interest rate reductions and fresh financing mechanisms for stock purchases. The spotlight is on the National People's Congress (NPC); its standing committee is presumed to meet soon to approve a rise in government debt and issues of government bonds. Over the last two months, the Hang Seng Index has surged approximately 20 per cent, making it one of the top-performing global indices.

The forthcoming three months are crucial for monitoring the government's subsequent measures, especially the upcoming NPC meeting, which is now anticipated to take place in November instead of October," stated James Wang, a strategist at UBS Group. "Most investors concur that there are increased structural investment opportunities with the Hong Kong-listed entities, with the internet sector being the favorite choice."

In other news, UBS has elevated its 2025 growth projection for China to 4.5% from the previous 4%, attributing this change to the surprisingly strong economic growth in the third quarter and the economic stimulation strategies in the realms of monetary, fiscal, and real estate executed by Beijing.