Short selling activity in Hong Kong has dropped to its lowest level in over three years, driven by a surge in the stock market following a wave of stimulus measures from China.
Data from the Hong Kong Stock Exchange shows that short positions accounted for just 9.7% of total market turnover last Friday, marking the lowest level since April 2021, according to Bloomberg’s calculations. This figure rebounded slightly to 10.7% by Monday.
The decrease in short selling comes as the Hang Seng Index, Hong Kong’s benchmark stock market gauge, has rallied 20% since hitting a low in September. This recovery aligns with a broader rebound in Chinese equities, spurred by Beijing’s recent stimulus efforts. Despite the initial excitement, investors remain cautious, awaiting more substantial government interventions such as increased fiscal spending.
