Hong Kong stocks rise from three-week low as auto, semiconductor makers buoy sentiment amid Fed taper concerns

Hang Seng Index rose 0.4 per cent Thursday, after earlier hitting a one-month low following the Federal Reserve rate hike guidanc
Auto and semiconductor producers lifted market while Alibaba Health, Haidilao and CNOOC are among loss leaders; Soho China rallied on a takeover offer

Stocks

Iris Ouyangin Shenzhen

Published: 11:13am, 17 Jun 2021

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Hong Kong stocks rose from a three-week low as gains in carmakers and semiconductor producers boosted sentiment, reversing earlier losses stoked by concerns about higher US interest rates.

The Hang Seng Index rose 0.4 per cent to 28,558.59 on Thursday, snapping a two-day decline. The index earlier fell as much as 0.8 per cent to the lowest level since May 24. The Shanghai Composite Index climbed 0.2 per cent to 3,525.60, ending a three-day slide.

BYD Co surged 8.4 per cent in Hong Kong and 10 per cent in Shenzhen trading after announcing a plan to list its chip unit on the ChiNext board. Geely Auto climbed 3.4 per cent.

Soho China surged 22 per cent to HK$4.63 for its biggest gain since March 2020 after US private equity group Blackstone offered HK$5 per share or US$3.05 billion to take control of the mainland office and retail property developer.

Semiconductor stocks surged. More than 30 stocks gained at least 10 per cent in mainland markets after local media reports said producers will raise prices amid a capacity crunch. GigaDevice Semiconductor, a favourite pick by northbound funds on Wednesday, advanced 10 per cent. In Hong Kong, SMIC added 5.4 per cent while Hua Hong Semiconductor jumped 10 per cent.

Stocks fell earlier in reaction to the Fed’s post-meeting statement, which projected its first interest rate hikes by the end of 2023, a timeline sooner than previously expected in 2024. The central bank has also started discussions about scaling back bond purchases, following a spate of data pointing to accelerating inflation.

“The market sentiment has been weak recently” while the Fed statement added pressure on the market, said Louis Wong, director at Phillip Capital Management in Hong Kong. Buying support was seen around 28,000 index level, he added.

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Hotpot restaurant chain Haidilao slumped with a 4.3 per cent loss while Alibaba Health Information slipped 2.4 per cent. Oil stocks fell after crude prices retreated. CNOOC and Sinopec fell by 0.6 per cent and 1.2 per cent respectively.

The Hang Seng Index has declined for the past three weeks, with heavyweight tech stocks hovering near their lowest level in almost a month amid regulatory risks and Fed policy outlook.

Next Digital was halted after the publisher’s editor-in-chief and four company directors were arrested on early Thursday under the Beijing-imposed national security law. The raid followed the recent jailing of its founder Jimmy Lai Chee-ying.

Police have also earlier frozen Lai’s controlling stake in the publisher, as well as his assets in local bank accounts under the controversial law.

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