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A public screen in Shanghai displays the Shenzhen and Hong Kong stock index levels in February 2022. Photo: Bloomberg

Alibaba, XPeng drive Hong Kong stocks to two-week high on China recovery outlook, Xi pledge

  • The Hang Seng Index closed at its highest level since June 10, having gained 3.1 per cent for the week
  • Alibaba Group, XPeng and WuXi Biologics led gainers, each rising by at least 5 per cent
Hong Kong stocks rose to a two-week high as sentiment continued to improve amid a brighter outlook for China’s economic recovery. Positive signals from Beijing this week helped fuel gains in tech and auto stocks.

The Hang Seng Index advanced 2 per cent to 21,719.06 at the close of trading on Friday, the highest since June 10. The benchmark gained 3.1 per cent for the week. The Hang Seng Tech Index climbed 4.1 per cent, while the Shanghai Composite Index added 0.9 per cent.

Alibaba Group surged 5.5 per cent to HK$113.90, while electric-car maker XPeng jumped 7.3 per cent to HK$136.30. WuXi Biologics and Sunny Optical Technology were also among the biggest gainers, rising more than 8 per cent.

The stock rebound has been strengthening on optimism about China’s recovery from the impact of Covid-19 lockdowns. President Xi Jinping pledged this week that the nation will strive to achieve 5.5 per cent growth this year, fuelling bets that policymakers will take more action to overcome recent setbacks.

Premier Li Keqiang said in a cabinet meeting this week that China will extend a tax exemption on purchases of electric cars to spur consumption, while more cities including Zhengzhou and Wenzhou have eased curbs on home purchases.

“Hong Kong stocks are still attractive as valuations are low relative to the historical average,” said Tao Yifei, a fund manager at HFT Investment Management in Shanghai. The government is shifting its focus to bolstering growth and putting the economy back at the top of its priorities, he added.

Stocks held onto gains amid reports China is launching a cybersecurity probe into China National Knowledge Infrastructure, the country’s largest online academic database. That followed an antitrust probe into the company in May. The government was also said to be scrutinising online sales of drug on internet platforms, a local me

Geely Auto’s Zeekr Co. 001 electric vehicle, pictured at the Auto Shanghai 2021 show in Shanghai on April 19, 2021. Photo: Bloomberg
EV maker Nio gained 2.3 per cent to HK$188.50, reversing an earlier drop of 3.2 per cent. Two people were killed in an accident at the electric-car maker’s headquarters during a test drive on Wednesday, company officials said.
GogoX Holdings, a Hong Kong-based logistics services company, slumped 22 per cent to HK$16.72 on the first day of trading. Its listing ceremony marked the return of the bourse’s ceremonial gong after a two-year hiatus because of the pandemic.

Sands China rallied 3.3 per cent to HK$15.10 and Galaxy Entertainment climbed 3.1 per cent to HK$42 after Macau extended their gaming concessions to the end of December, pending the implemenation of the new gaming law in the city.

An uptick in other markets in Asia also lifted sentiment. Yields on Treasuries fell because of a disappointing overnight report on US jobless claims.

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