Hong Kong stocks arrest two-day slide on bullish Wall Street calls while ChatGPT concept fuels new winners

Goldman says there’s more upside to Chinese stocks even after recent rally as economic growth rebounds from reopening drive

Some traders bet on higher Fed terminal rate in 2023 versus current consensus, causing jitters in ‘downshift’ camp

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A businessman standing in front of Chinese stock tickers. Photo: Shutterstock Images

Published: 10:49am, 9 Feb 2023Updated: 5:10pm, 9 Feb 2023

Hong Kong stocks advanced on optimism there is more room for upside in the market on the back of China’s reopening while the ChatGPT concept drove further gains in tech stocks.

The Hang Seng Index jumped 1.6 per cent to 21,624.36 at the close of Thursday trading, snapping a two-day slide for the best gain in two weeks. The Tech Index added 3.2 per cent, while the Shanghai Composite Index climbed 1.2 per cent.

Alibaba Group jumped 4 per cent to HK$107.60 after the company said it was testing a ChatGPT-style chatbot, joining a growing bandwagon. Tencent added 3.5 per cent to HK$395.60, and smartphone maker Xiaomi surged 8.5 per cent to HK$13.52. Developer Longfor Group gained 3 per cent to HK$25.70, and casino operator Sands China jumped 5.3 per cent to HK$29.50.

“China’s ongoing reopening [will] provide boosts to global growth, inflation, and China-exposed assets,” Goldman Sachs analysts including Kinger Lau said in a note on Wednesday. There is more upside for China equities from here even after the recent sharp rally, they added.

China’s economic reopening is well under way and policies are aligned to boost growth, analysts at Morgan Stanley said on Wednesday. The supportive business environment is likely to continue to prevail as policymakers will prop up the economy to maintain social stability, they added.

The Hang Seng Index appreciated as much as 55 per cent from a low in late October after China abandoned its zero-Covid policy, before losing some momentum this month. The city’s benchmark index has retreated 4.7 per cent since peaking on January 27, which some Wall Street analysts see as a buying opportunity.