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People walk past stock tickers outside the Exchange Square complex in Central, Hong Kong. Photo: Sam Tsang

Hong Kong stocks overturn losses as BYD, PetroChina jump amid recovery signals while Alibaba, Kuaishou extend gains

  • Alibaba climbed for a second day after a bullish market response to its proposed business reorganisation; Kuaishou surged as 2022 revenue beat consensus
  • Losses in China Life Insurance and Baidu earlier dragged the Hang Seng Index down
Hong Kong stocks rebounded as the benchmark index approached a four-week high amid signs of recovery in China’s economy. Alibaba Group reached the highest level in five weeks, while Kuaishou Technology and PetroChina advanced on strong 2022 report cards.

The Hang Seng Index added 0.6 per cent to 20,309.13 at close of trading on Thursday, taking it to the highest level since March 7. The Tech Index added 0.6 per cent while the Shanghai Composite Index gained 0.8 per cent.

Kuaishou surged 5.6 per cent to HK$59.40, PetroChina rallied 7.8 per cent to HK$4.68 and Alibaba Group added 2.5 per cent to HK$96.90. Electric vehicle maker BYD jumped 3.3 per cent to HK$225.20 and peer Xpeng surged 7.5 per cent to HK$44.40.

“We see additional evidence that the consumption-driven rebound is indeed under way,” strategists at BofA Securities said in their notes from a China tour. Policymakers are prioritising efforts to restore confidence of consumers, homebuyers, as well as foreign and private businesses, they added.

China’s economic recovery is picking up pace this month, Premier Li Qiang said at the Boao Forum this week.

Alibaba Group traded near the highest level since mid-February, tracking a second-day surge in New York on the group’s proposed business revamp. The stock has gained almost US$38 billion in market capitalisation since the plan was unveiled, including a 13 per cent jump in Hong Kong on Wednesday.

Is Alibaba’s US$34 billion stock rally justified? Here’s what some analysts say

“The separate business unit management teams will also have more incentive to push for better performance and efficiency,” Moody’s said in a report on Thursday. “In addition, the restructure could reduce regulatory risks and ease scrutiny” after a government crackdown on technology companies in recent years, it added.

02:27

Baidu unveils China’s answer to ChatGPT, sends stocks tumbling

Baidu unveils China’s answer to ChatGPT, sends stocks tumbling

The Hang Seng Index earlier weakened when two-thirds of its members retreated. Baidu tumbled 3.6 per cent to HK$149.50 while China Life Insurance sank 5.6 per cent to HK$12.42. A government report on Friday that may show manufacturing in China expanded albeit at a slower pace in March.

Chinese AI stocks slide with Baidu as Elon Musk adds to chorus on GPT-4 risks

Kuaishou rallied, adding to a 20 per cent jump over the past two weeks. The firm recorded a 16.2 per cent increase in sales last year to 94.2 billion yuan (U$$13.6 billion) as losses narrowed amid a rivalry with TikTok owner ByteDance. PetroChina also beat earnings consensus, aided by steady crude oil prices.

Elsewhere, Zhongtian Construction Hunan started trading in Hong Kong for the first time, with the stock surging 126 per cent to HK$2.67.

Key Asian markets were mixed. Japan’s Nikkei 225 Index fell 0.4 per cent while the S&P ASX 200 Index in Australia rose 1 per cent and the Kospi in South Korea advanced 0.4 per cent.

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