Hong Kong: HSBC Holdings Plc and Standard Chartered Plc in Hong Kong are among the biggest gainers in bank stocks across the region due to optimism that faster economic growth and higher interest rates will increase profits.
HSBC shares jumped 6.9%, while Standard Chartered rose 6.3% on Tuesday after the market closed for two days.
The MSCI AC Asia Pacific Financials Index rose nearly 1%, to its highest level since June 2018 and on its way for an eighth consecutive day of gains.
“Cyclical stocks, particularly the financial sector, can be seen heading into the wave of higher yields in the Tuesday session,” said Jingy Pan, market analyst at IG Asia Pte.
The significant slowdown in HIV cases and advances in vaccine launches have boosted the potential for a rebound in global growth.
US Treasury bonds broke through key levels this week as the global debt sell-off pushed yields to their highest in nearly a year.
The extremely low interest rates affected bank profits, even as the central bank’s stimulus measures boosted markets and liquidity.
Both HSBC and Standard Chartered are due to release their earnings next week and investors are optimistic about the resumption of dividends.
In Japan, major banks have jumped by at least 20% this year, nearly eliminating losses in 2020 caused by the epidemic.
“Banks or financial institutions generally do well when market prices rise – which they have been lately – based on expectations of global deflation,” said Chetan Seth, Asia Pacific equities analyst at Nomura Holdings Inc.