[Asia Economy Reporter Song Seung-seop] The Hong Kong stock market, which reopened immediately after the National Day holiday, surged by about 6%. The overnight rise in U.S. stock prices, short squeeze, and decreased trading volume are cited as causes.
According to major foreign media, as of 5 p.m. Korean time on the day, the Hong Kong Hang Seng Index recorded 18,071.79, up 5.81% from the previous closing price. In particular, the Hang Seng Tech Index, which reflects the stock price trends of Chinese big tech companies listed in Hong Kong such as Alibaba and Tencent, jumped 8.2% intraday compared to the previous trading day. The stock price of BYD, a Chinese electric vehicle company that surpassed cumulative sales of 1 million units from January to last month, rose about 10%.
The sharp rise in the Hong Kong stock market was observed after the strong performance of the New York stock market on the 4th (local time). In the U.S., the possibility that the Federal Reserve (Fed) may slow the pace of interest rate hikes led to an upward trend in the local stock market.
However, the Hang Seng Index still faces unresolved issues such as China’s "zero-COVID" policy, U.S.-China conflicts, and a real estate market downturn, which are considered major factors for stock price declines. Accordingly, some suggest the possibility of a stock price increase due to a "short squeeze." A short squeeze refers to the act of short sellers buying back stocks to prevent larger losses when stock prices rise.
There is also a view that the decrease in trading volume influenced the market. Mainland China’s stock market was closed for three days due to the National Day holiday, leading to reduced stock trading volume and possibly increased market volatility.
Meanwhile, the 20th National Congress of the Communist Party of China, expected to officially confirm Chinese President Xi Jinping’s third term on the 16th, is anticipated. In the Greater China region, expectations for additional economic stimulus measures are emerging in relation to this event.
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