Hang Seng Hits Six-Week High as Healthcare, Biotech Rally

The Hang Seng Index climbed to 24,692, its highest level since June 15, with gains led by healthcare and biotechnology stocks after Beijing released second-quarter economic data.

Hong Kong shares rose more than 1% on the session. The National Bureau of Statistics reported Q2 GDP expanded 4.3%, below forecasts of 4.5% and down from 5.0% in Q1. Fixed-asset investment fell 5.7% in Q2 after a 4.1% decline in Q1; analysts had expected a 5.0% drop. First-half growth was 4.7%, above expectations of 4.5%.

Additional data for June showed house prices declined 3.3%. Industrial production increased 5.3% and retail sales were up 1.0%. The surveyed unemployment rate eased to 5.0% from 5.1%.

A separate trade release the previous day recorded exports rising about 27% in June and imports up roughly 36%, with a trade surplus near $125 billion.

Healthcare and biotechnology names led the market. Innovent Biologics advanced about 8.5% and WuXi AppTec rose about 5.4%. CSPC Pharmaceutical Group, Hansoh Pharmaceuticals, Sino Biopharmaceutical and Wuxi Biologics each gained more than 4%. Laggards included China Hongqiao, Aluminium Corporation, Xiaomi and China Life Insurance.

The index has recovered from a June low of around 22,504 to 24,692 and moved above a March swing level at 24,185. It was trading above its 50-day exponential moving average and the relative strength index was approaching 70. Some market participants pointed to 25,000 as the next reference level.

An industry report found, “China is now the main source of licensing assets for Western pharma, and for a growing class of built-to-buy biotechs,” and projected Chinese assets would account for more than two-thirds of industry deal value this year, up about 42% year-on-year.

Upcoming releases on domestic demand and earnings reports from major Hong Kong-listed companies are due in the coming days and may affect market direction.