Stocks in Hong Kong reach a 2-week peak as mainland markets exhibit tranquility

Hong Kong and Mainland Markets Show Recovery After Volatile Week

After a week of wild swings, the mainland's markets have shown signs of strengthening. The Shanghai Composite Index added 0.4 per cent, while the Hang Seng Index closed at 25,633.91, its highest in two weeks. This recovery comes after last week's jolt, which marked the biggest sell-off in almost five months.

Investors are keeping a close eye on the volatility in mainland stocks, but there are signs of optimism. JD Logistics surged 3.4 per cent to HK$13.53, being added to the Hang Seng Index in the latest quarterly reshuffle. Joining JD Logistics is Pop Mart International, which tumbled 7.1 per cent to HK$287.60, another new addition to the index.

Alibaba Group Holding rallied 4.2 per cent to HK$137.30, while Tencent Holdings added 2 per cent to HK$617.50. Baidu jumped 9.5 per cent to HK$106.20 due to a plan to sell yuan-denominated unsecured notes on offshore markets. China Telecom also saw a 0.7 per cent increase, closing at HK$5.74, as it was included in the Hang Seng Index reshuffle.

The Hang Seng Tech Index rose by 1.2 per cent, indicating a positive trend for the technology sector. The CSI 300 Index strengthened by 0.2 per cent, mirroring the recovery in the mainland markets.

Hong Kong stocks are increasingly correlated with China's onshore markets, with mainland buying accounting for more than a fifth of daily transactions on the city's exchange through the cross-border exchange link programme.

In other news, Microsoft has announced a change in its licensing structure for large customers that will take effect in November, impacting enterprise agreements and causing a price adjustment. Additionally, the No 8 signal was downgraded to No 3 at 1.10pm.

As the markets continue to recover, investors will be watching closely for any signs of further volatility. However, the recent reshuffle of the Hang Seng Index and the positive performance of many major stocks indicate a cautious optimism for the future.