China, HK stocks surge as Shanghai declares victory over Covid-19

China, HK stocks surge as Shanghai declares victory over Covid-19
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SHANGHAI (June 27): Chinese stocks rose on Monday (June 27), with tourism and consumer sectors leading the gains, as Shanghai's top party boss declared victory over Covid-19 after the city reported zero new local cases for the first time in two months.

Hong Kong equities surged the most in nearly six weeks, with tech giants climbing to their highest level since March 1.

The CSI 300 Index rose 1.3% to 4,449.70 points at the end of the morning session, while the Shanghai Composite Index gained 0.9% to 3,379.16 points.

The Hang Seng Index added 3.2% to 22,403.53 points. The Hong Kong China Enterprises Index gained 3.4% to 7,886.79.

Shanghai Communist Party chief Li Qiang said at the opening at the city's party congress that authorities had "won the war to defend Shanghai" against Covid-19 by implementing the instructions of Chinese President Xi Jinping.

Beijing said it would allow primary and secondary schools to resume in-person classes, while Shanghai will gradually resume dining-in at restaurants from June 29 in some areas. 

Also boosting sentiment, China's central bank said it made the biggest daily cash injection into the banking system via open market operations in nearly three months. 

Stocks gained in Asia amid improved risk sentiment after Wall Street rebounded strongly at the end of last week as oil prices eased. 

Profits at China's industrial firms contracted for a second month in May, but at a slower pace than in April, due to the resumption of activity in major manufacturing hubs as Covid-19 curbs were eased. 

Tourism companies jumped more than 4% and consumer staples rose nearly 3%, while shares in healthcare and energy firms added more than 2% each.

China's securities regulator proposed rules to regulate private pension investment via mutual funds, setting the criteria for qualified products and sales agents under a scheme that will channel fresh savings into its capital markets. 

Xi will visit Hong Kong for the 25th anniversary of the city's handover to mainland China, marking his first known visit outside the mainland since January 2020 after the Covid-19 outbreak, state news agency Xinhua reported.

The Hang Seng Tech Index soared 5.7%, with index heavyweights Alibaba, Tencent and Meituan up between 4% and 6%.