Hong Kong stocks log winning week as mainland China funds buy big-cap tech firms while Fed rate outlook improves

Funds from mainland China have loaded up about US$12 billion of Hong Kong-listed stocks over the past 10 straight weeks

Slowing consumer and producer prices in the US aided risk appetite as Fed rate outlook improves

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Stock prices on a big screen outside the Exchange Square in Central, Hong Kong. Photo: EPA-EFE

Published: 10:51am, 14 Apr 2023Updated: 5:01pm, 14 Apr 2023

Hong Kong stocks gained as mainland China funds supported the market with purchases in big-cap tech companies while major corporate insiders retreated. Slowing price gains in the US fuelled hopes the Federal Reserve will temper or pause its rate increases soon.

The Hang Seng Index climbed 0.5 per cent to 20,434.25 at the closing of Friday trading, bringing the week’s gain to 0.5 per cent. The Tech Index added 0.1 per cent while the Shanghai Composite Index advanced 0.6 per cent.

Alibaba Group gained 0.4 per cent to HK$94.50 and Tencent added 0.6 per cent to HK$365.40, halting a sell-off this week. Electric-car maker BYD jumped 2.1 per cent to HK$226.80, and peer Geely Auto added 3.9 per cent to HK$10.14. HSBC appreciated 0.6 per cent to HK$55.60 while WuXi Biologics gained 1.8 per cent to HK$54.80.

Mainland funds bought HK$3.3 billion (US$420 million) worth of Hong Kong-listed stocks through the Stock Connect so far on Friday, taking the inflows this week to HK$6.4 billion. They have been net buyers in 10 successive weeks, totalling about US$12 billion.

CNOOC, WuXi Biologics and China Mobile were among the top targets. They gained 0.8 per cent, 1.8 per cent and 1.6 per cent respectively in Friday trading.

“The economic momentum in Asia, in China looks more optimistic than other regions, and central banks across Asia, and in the US, are nearly done with interest rate raising,” said Tai Hui, a strategist in Hong Kong at JPMorgan Asset Management. He recommends stocks in tourism and tech sectors.

Elsewhere, US producer prices unexpectedly fell 0.5 per cent last month, the Labor Department said on Thursday. This followed a government report on Wednesday showing consumer prices rose at an annual rate of 5 per cent in March, easing from a 6 per cent pace in February.