The Hang Seng Index closed 1.0% (or 247 points) higher at 24,031 in Friday's trading (Oct 9), snapping a two-session losing streak. The rally was driven by investors snapping up stocks that had previously faced significant downward pressure. Market sentiment also improved, buoyed by gains in US futures and a recovery across Asian stock markets following earlier declines.
A positive catalyst emerged from a drop in oil prices after US President Donald Trump stated that the United States would not attack Iran prior to the November midterm elections. The easing of short-term escalation risks helped alleviate concerns regarding energy supply disruptions and global inflationary pressures. However, elevated US Treasury yields remain a point of concern, as they could limit the upside potential for risk assets.
At the sectoral level, financial, property, and technology stocks were the primary drivers of the Hang Seng's gains. AIA rose 2.5%, Tencent climbed 1.4%, Sun Hung Kai Properties gained 1.2%, PICC Property & Casualty rose 1.4%, and Xiaomi advanced 1.5%. Conversely, the healthcare sector and certain technology service stocks remained under pressure; Wuxi Biologics and CSPC Pharmaceutical both fell by approximately 1.2%.
Investors are also shifting their focus to Chinese economic data following the reopening of mainland markets after the Golden Week holiday. September inflation data and trade figures will be the next key indicators to watch for insights into the country's domestic consumption and trade activity. Stronger data could bolster Chinese and Hong Kong stocks, whereas disappointing results could potentially curb recovery momentum once again.
Newsmaker observes that the Hang Seng's weekend rebound signals the emergence of bargain-hunting activity following the selling pressure seen in previous sessions. However, this strengthening still requires confirmation, as risks stemming from high US yields, oil prices, and China's economic conditions have not fully dissipated. If global sentiment continues to improve and Chinese economic data delivers a positive surprise, the Hang Seng has the potential to extend its rebound. Conversely, renewed pressure on Wall Street or rising energy prices could trigger a sell-off.