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Hong Kong - China’s large-cap shares extended their outperformance amid investor optimism about MSCI inclusion and speculation state-backed funds were keeping markets buoyant before President Xi Jinping’s trip to Hong Kong this week.
The SSE 50 Index of some of the nation’s biggest companies climbed 0.6% to 2 544.37 at 07:22, heading for the highest close since August 2015. Gains were led by Poly Real Estate and SAIC, which are among the 222 mainland-traded shares that will enter MSCI’s global benchmark indices. In Hong Kong, the Hang Seng Index rose 0.4%, set to snap a four-day losing streak.
The SSE 50 Index is outperforming the broader Shanghai Composite Index by the most in two years as a regulatory campaign to curb leverage drives up funding costs for smaller, privately-run firms.
China has a history of influencing domestic markets during important political events, and was said to have made preparations to support the Hong Kong stock market if needed to create a positive atmosphere before July 1, when Xi will visit the city to mark 20 years of Chinese rule.
"The usual big cap stocks in the mainland are all being supported," said Andrew Clarke, director of trading at Mirabaud Asia in Hong Kong.
"It’s an easy way to support the indices ahead of the 20th handover anniversary. You can’t have the mainland market down with Hong Kong being up."
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