Alibaba, AIA, NetEase lead Hong Kong stock rebound as market slump to 9-month low deemed excessive
- Hang Seng’s 14-day relative strength index fell below 30, as did readings on 28 of the index’s 80 members, a threshold that signals the market is technically oversold
- Baidu advanced while Anta Sports Products dropped before publishing their half-year results later today
The Hang Seng Index rose 1 per cent to 17,791.01 at the close of Tuesday trading, snapping a seven-day slide. The benchmark slumped 1.8 per cent on Monday to the lowest level since November 28. The Tech Index strengthened 2 per cent, while the Shanghai Composite Index added 0.9 per cent.
Alibaba Group gained 1.9 per cent to HK$87.35, NetEase rallied 2.3 per cent to HK$159.20 and AIA Group advanced 1.3 per cent to HK$68.25. China Resources Power gained 2.2 per cent to HK$16.14 after interim profit increased 54 per cent from a year earlier. Baidu added 0.9 per cent to HK$123.
Limiting gains, Anta Sports Products lost 1 per cent to HK$77.65 while peer Li Ning tumbled 3.3 per cent to HK$37.25. Baidu and Anta are among index members due to report their earnings later today.
The Hang Seng Index’s 14-day relative strength index fell to 27, below the 30-point threshold that indicates the market is oversold and poised to reverse course. Twenty-eight of the 80 index members also showed similar readings, compared with 40 when the ratio reached the highest since March 2022, according to Bloomberg data.
“Hong Kong stocks may be in for a rebound amid policy support,” said Dai Qing, an analyst at Guotai Junan Securities. “If the market further prices in weak economic recovery, stocks with high dividend payouts and low valuations will probably outperform.”