Hong Kong stocks climb after call for ‘forceful’ state support to halt market rout

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Good morning. Shares in Hong Kong posted their biggest daily gains this year following a call from China’s premier for “forceful” state support to halt a punishing market rout.

The city’s benchmark Hang Seng index rose 2.6 per cent yesterday after Premier Li Qiang called for “more forceful and effective measures to stabilise the market and boost confidence”.

The Hang Seng fell almost 14 per cent last year, making it one of the worst-performing benchmark indices across all large markets. Stocks in Shanghai, Shenzhen and Hong Kong continue to lose ground as a result of slowing economic growth in China, an unresolved financial crisis in the property sector and worsening tensions between Beijing and Washington.

Traders said yesterday’s gains would prove fleeting if state support did not materialise. “This could be the boy that cried wolf,” said the trading desk head at one investment bank in Hong Kong. Here’s more on Beijing’s efforts to halt the sell-off. 

And here’s what else I’m keeping tabs on today:

• New Hampshire primary: Voting is under way in the US state. Today could be a make-or-break moment for Nikki Haley’s effort to defeat Donald Trump in the race for the Republican presidential nomination. Follow our live coverage.

• Economic data: The S&P Global/HCOB flash January purchasing managers’ index for the manufacturing and services sectors is due for the EU, France, Germany, Japan, UK and US.

Join the FT’s Martin Wolf and Alec Russell along with expert guests today at 21:00 HKT as they discuss the challenge posed by migration to liberal democracies. Subscribers can register for free here.

Five more top stories

1. Turkey’s parliament has voted in favour of Sweden joining Nato, marking a significant step forward in the Scandinavian country’s long-fought bid to enter the western military alliance. Sweden dropped its centuries-old policy of military non-alignment after Russia’s 2022 full-scale invasion of Ukraine. Here’s what’s next for Stockholm’s Nato bid.

2. Israeli forces suffered their deadliest day since the start of the ground war in Gaza. Twenty-four soldiers were killed in the fighting with Hamas on Monday, 21 of them in a single incident in central Gaza. Paying tribute to the dead soldiers, Israeli Prime Minister Benjamin Netanyahu resisted international calls for a ceasefire deal, vowing to “not stop fighting until total victory”.

3. Russia’s war in Ukraine has turned into “a battle of ammunition”, Nato’s head has warned. Yesterday’s comments from Nato secretary-general Jens Stoltenberg came as the alliance signed a €1.1bn deal to procure more ammunition its members can send to Ukraine or use to replenish their own stocks. Faced with dwindling supplies, Ukrainian soldiers on the front line have told the FT in recent days that they are forced to ration munitions.

4. The chief executive of United Airlines, one of Boeing’s biggest customers, warned he is rethinking a big order for new aircraft from the beleaguered plane manufacturer. United has been forced to ground 79 of its Boeing 737 Max 9 planes as a federal investigation looks into a damaging mid-flight fuselage breach of an Alaska Airlines aircraft earlier this month.

5. Other drugmakers could still “win” the race in the rapidly growing obesity market dominated by Novo Nordisk and Eli Lilly, according to the chief executive of biotech company Zealand Pharma. The claim by Adam Steensberg follows a 100 per cent surge in the company’s share price in the past year as investors bought the stock thanks to the potential of its anti-obesity drugs. Here’s why Steensberg believes it’s not too late for others to develop weight-loss products.

News in-depth

China’s feared spy agency is stepping out of the shadows. A publicity campaign launched by the Ministry of State Security features slick ads, an official WeChat account and even a comic series, while the agency’s leadership has also been accorded higher political status. Analysts say the growing public and political role of the MSS is part of Xi Jinping’s increasing focus on security, as China’s leader tightens his hold on the country.

We’re also reading . . . 

• Citi’s bet on China: Much has changed since the lender first applied for an investment banking licence in China.

• Audio deepfakes: A faked Joe Biden robocall underlines the prevalence of cheap AI tools being used to create clips aimed at swaying voters.

• Populism: Donald Trump, Narendra Modi and Benjamin Netanyahu have all presided over growth. Janan Ganesh asks, why hasn’t populism done more economic harm?

Chart of the day

Bitcoin has lost 15 per cent of its value over the past two weeks, as some investors use the much-hyped launch of bitcoin exchange traded funds earlier this month to take profits and exit their holdings of the volatile cryptocurrency.

Take a break from the news

Oscar nominations were announced yesterday after a year in film with a striking number of critically praised and commercially popular hits (remember “Barbenheimer”?). Here are all the snubs and surprises.

Additional contributions from Tee Zhuo and Gordon Smith