(Bloomberg) -- Hong Kong stocks saw a sudden spike in afternoon trading on Tuesday, with property shares leading the advance.
The Hang Seng Index rose 2% at the close as inflows from across the border continued for a seventh day. Before the advance, the gauge had fallen for three straight sessions. A measure of property stocks listed in the city increased 2.1%, the most since July 6.
Analysts saw no apparent reason for the surge. The Hang Seng Index has underperformed all year, entering the day down 13%. Hong Kong has recently dealt with another wave of the Covid-19 outbreak, with the city reporting its 40th death due to the virus Tuesday. Investors have also been rattled by China imposing a controversial national security security law on the city, worsening relations with the U.S.
Wharf Real Estate Investment Co. rose 7.5% to lead gains, while New World Development Co. and Hang Lung Properties Ltd. added at least 3.3%. The city's home July sales rose 35% year-on-year in terms of value, the Land Registry said in a statement Tuesday. That's the second monthly increase after declines in the January-May period.
The Hong Kong property gauge is trading at 8 times expected earnings over the next 12 months, compared to a peak of 27 reached in 2007.
Financials also advanced, with China Life Insurance Co. and AIA Group Ltd. climbing at least 4.1%. HSBC Holdings Plc added 0.8% after dropping 3.9% earlier in the session. The lender on Monday reported first-half profit that halved to $5.6 billion because of higher credit provisions.
The Hang Seng China Enterprises Index also saw a sudden increase and climbed 1.7%. Tencent Holdings Ltd. provided the biggest boost to the gauge of offshore-listed China stocks, rising 2% as it trades near a record. Mainland investors bought HK$3.4 billion ($442 million) of Hong Kong equities on the day.
The Hong Kong dollar hovered near 7.75 versus the greenback, which is the strong end of its trading band.
©2020 Bloomberg L.P.
With assistance from Bloomberg
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
