Asian equities exhibited mixed performance, largely influenced by geopolitical tensions in the Middle East, although Hong Kong notably bucked the trend with a significant rally. Markets in Mainland China remained closed for the week-long national holiday, and trading in Taiwan was halted due to severe weather conditions from a typhoon. Simultaneously, India observed a market closure in recognition of Mahatma Gandhi Jayanathi, which celebrates the birth of Mahatma Gandhi. The combined effect of these closures contributed to a calmer trading environment in the region, with particular focus shifting towards Hong Kong’s notably resilient performance.
In Hong Kong, the market saw an impressive surge, particularly in growth stocks, amplified by trading volume that soared to 398% of the one-year average. This robust activity resulted in 437 stocks finishing higher, contrasted by only 68 decliners. Every sector and sub-sector showed gains, demonstrating strong breadth in the upward momentum. Notable stocks such as Tencent, Alibaba, and Meituan each recorded significant increases, driving investor sentiment higher. The absence of Southbound Stock Connect and Mainland China’s participation, usual contributors to the turnover in Hong Kong, did not hinder this strong showing, as the local market remained vibrant and resilient.
Electric vehicle stocks were particularly buoyant, driven by positive September sales figures that bolstered investor optimism. Meanwhile, Alibaba made headlines with a strategic share buyback, purchasing $4.1 billion worth of its own shares, which decreased the outstanding shares by 2.1%. Furthermore, the real estate sector in Hong Kong experienced an uplift following supportive government policies, with select real estate stocks surging dramatically. The gains in this beleaguered sector highlighted the market’s reaction to government interventions aimed at revitalizing confidence and investment in real estate.
The anticipation of increased monetary and fiscal stimuli in China has prompted some investors to reassess their positions, specifically regarding their underweight in Chinese equities. Reports from Mainland Chinese media indicated a greater urgency among hedge funds to recalibrate their exposure to the Chinese market, even as levels remain lower than those observed in earlier years. The performance of Mainland Chinese futures in overseas markets reflected investor optimism, with considerable gains hinted at for the forthcoming reopening of the Mainland exchanges, anticipated to accentuate a focus on small-cap stocks as local investors seek opportunities, while foreign players gravitate towards more established mega-cap stocks.
The increased interest in the Mainland Chinese stock market was also illustrated by a surge in new brokerage account openings. During the holiday, numerous brokerage houses continued to operate, leading to an impressive threefold increase in new accounts and a sixfold surge in password retrieval requests. This rising demand for brokerage services signals a reinvigorated interest from local investors aiming to engage with the stock market amidst a backdrop of stabilization and policy support.
In terms of market specifics, the Hang Seng Index and Hang Seng Tech experienced gains of 6.2% and 8.53% respectively, although trading volume saw a slight decline from previous sessions, still remaining 398% of the average. All sectors reflected positive movement, particularly real estate, which posted a notable increase of 17.03%. The overall market sentiment continued to be defined by a solid performance in growth and small-cap stocks over their value and large-cap counterparts, showcasing a dynamic environment where investor focus pivoted towards sectors perceived to have untapped potential. With the Mainland exchanges set to reopen, the market is positioned for a pronounced reaction to the previous week of developments.
