Hong Kong stocks rose to a four-month high in its first trading day since the Christmas holidays, during which China scrapped its overseas-travel quarantine rule.
The benchmark Hang Seng Index HSI, +1.56% rose as much as 2.6%, and was last up 2.3% at 20050.23, paving the way for the index’s best closing since August.
The market’s gains came after Beijing officials said Monday that they would no longer require inbound travelers to China to undergo quarantine from early January.
A wide range of sectors drove gains, with consumer goods and services companies leading the pack. Restaurant operator Haidilao International Holding Ltd. 6862, +4.83% jumped 6.9% and Budweiser Brewing Co. APAC Ltd. 1876, +2.83% added 5.3%. Tourism company Tu Yi Holding Co. 1701, +9.23% soared 18%, while online travel agency Trip.com Group Ltd. 9961, +2.81% TCOM, +4.32% gained 3.6%.
Citi analysts characterized the Chinese government’s latest easing of Covid curbs as a sign of “accelerated border reopening.”
This “is likely to lead to upside risks to our covered stocks with Chinese outbound exposure, such as airport duty-free, travel agency, hotel names in 2023,” Citi said in a note.
Sectors that aren’t directly linked to consumption and travel also gained ground.
Solar-energy equipment makers Xinyi Solar Holdings Ltd. 968, +8.32% and Flat Glass Group Co. 601865, -0.18% both surged 6.7%, after latest industry data suggested easing pressure in raw material costs.
Power producers also advanced, as recent weekly data showed recovering energy demand, and China’s accelerated pace of reopening further buoyed optimism. China Power International Development Ltd. 2380, +18.84% jumped 21% and China Resources Power Holdings Co. 836, +17.10% rose 15%.
Write to Yifan Wang at email@example.com