Hong Kong Stocks Surge After Service Data Boost; Analysts Predict Further Upside Potential

Hong Kong stocks saw a significant surge, with nearly all index members gaining, including Tencent and Alibaba. The Hang Seng Index jumped by 2.5 per cent to 18,533.34, the largest increase since May 2. The Tech Index also soared by 3 per cent amid positive market sentiment. The Shanghai Composite Index experienced a slight increase of 0.2 per cent.

Following a report indicating expansion in China's services sector, Hong Kong stocks made impressive gains in a month. The Caixin services PMI for China rose to 51.7 last month, surpassing analyst expectations and marking the fastest growth in two years. This growth contrasted with a contraction in Chinese manufacturing activity, which was unexpected by analysts.

Before the recent rise, the Hang Seng Index had faced two weeks of decline due to profit-booking sales and uncertain economic conditions. Analyst Kevin Liu of CICC highlighted the market's correction of extreme expectations, emphasizing the need for additional catalysts to sustain further upside potential in the market.