China stocks rose on Monday as analysts flagged chances of policy easing from the central bank’s monetary policy report, while Hong Kong shares were weighed down by food delivery giant Meituan ahead of its earnings results.
The CSI300 index – based on the top 300 stocks in Shanghai and Shenzhen – rose 0.5% to 4,915.79 by the end of the morning session, while the Shanghai Composite Index gained 0.7% to 3,583.37.
The Hang Seng index dropped 0.4% to 24,962.11, and the Hong Kong China Enterprises Index lost 0.4% to 8,937.91.
China’s central bank on Friday said it would keep its prudent monetary policy “flexible and targeted” and strike a balance between economic growth and risk controls.
Nomura said some changes in the wording of the People’s Bank of China’s (PBOC) third-quarter monetary policy implementation report represented an official change to the PBOC’s policy stance and set the stage for more decisive monetary and credit easing.
“We expect the chance for an RRR cut to rapidly rise in the next couple of months, but we still view the likelihood of a policy rate cut as quite small,” Nomura said in a note.
HK Tech Index Drops
The PBOC said it saw risks in the property market generally under control. Real estate developers dropped 3.3%, retreating from the previous session’s jump fuelled by policy easing bets.
“We do not yet see a sharp shift in the ongoing property curbs,” Nomura said.
Meanwhile, semiconductors and new energy stocks surged 4.3% and 3.2%, respectively.
In Hong Kong, food delivery platform Meituan slumped 3.4%, weighing on the Hang Seng Index. Meituan is expected to report its third-quarter earnings results this Friday.
The Hang Seng Tech Index dropped 0.8%, while consumer staples and healthcare firms lost more than 1.8% each.
China Resources Beer, ENN Energy, JD.COM and Netease rose on news that they would be added to the Hang Seng Index.
- Reuters with additional editing by Jim Pollard