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Hong Kong stocks jump as Xiaomi returns to FTSE Russell indexes while Fed tempers inflation concerns

  • Xiaomi rose to highest in three months as FTSE Russell agreed to reinstate stock from next month following a US court decision
  • Stocks in Asia-Pacific region also advanced as Fed speakers repeated dovish views, pledging to keep accommodative policies

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Martin Choi
Hong Kong and mainland China stocks gained along with major Asia-Pacific markets after Federal Reserve officials allayed concerns about inflation outlook. Xiaomi Corp jumped to a three-month high after getting back into FTSE Russell indexes.
The Hang Seng Index advanced 1.8 per cent to 28,910.86, reaching its highest level since April 29. The Shanghai Composite added 2.4 per cent to a three-month high, after a bullish forecast by Guotai Junan Securities and amid speedier vaccination efforts.

“Market sentiment has improved, and we’re seeing a bit of a breakthrough in the Hang Seng Index,” said Stanley Chan, director of research at Emperor Securities.

Smartphone maker Xiaomi rose 4.1 per cent to HK$27.75, the highest level since February 23. FTSE Russell announced on Monday that it would reinstate Xiaomi into its global indexes in two tranches from June 7 and June 21. The company is also due to report its annual results on Wednesday with consensus calling for a 34 per cent jump to 1.74 billion yuan (US$271.6 million).

Federal Reserve officials on Monday reiterated they expected inflation pressures to be temporary. Dovish comments from speakers including St Louis Fed president James Bullard, suggest any policy tightening is not happening any time soon, Reuters reported.

Other notable winners include WuXi Biologics, which surged 5.9 per cent to HK$116.30 while Tencent gained 4.2 per cent to HK$610. Hong Kong Exchanges and Clearing gained 5.4 per cent to HK$474.60, the most in four months. The bourse operator will keep a steady course connecting China with global markets, chief executive Nicolas Aguzin said on Tuesday.

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