The Hang Seng Index extended its gains during morning trading in Hong Kong. Buybacks of mainland-linked technology stocks prevailed amid expectations for lending support measures to promote shareholder returns.
In Hong Kong morning trading on the 2nd, the Hang Seng Index extended its gains, closing the morning at 23,437.41, up 142.99 points from the previous weekend. The market heard that the People's Bank of China and the China Securities Regulatory Commission would meet with financial institutions regarding lending measures to support shareholder returns, prompting prevailing buybacks of mainland-linked technology stocks. However, net selling by mainland investors continued to weigh on the market.
While mainland-linked stocks, including internet services company Tencent, attracted buybacks, fund outflows continued, limiting the factors supporting the overall market. Market participants are watching the specific details and implementation timing of the lending support measures.
The latest move had the strong appearance of a short-term rebound following the meeting with financial institutions on support for shareholder returns, while uncertainty remains over the longer-term market outlook. Investors are likely to continue monitoring fund flows, mainland-linked stocks and the policy response from the Chinese authorities.