Tech sector lifts Hong Kong index after US titans collectively rise to all-time highs

PUBLISHED : Monday, 04 June, 2018, 6:44pm
UPDATED : Monday, 04 June, 2018, 10:39pm

Technology stocks helped Hong Kong’s benchmark index to close higher for a third consecutive session on Monday, taking their cue from Wall Street on Friday after shares of Apple, Amazon, Microsoft, Facebook and Netflix set records.

Sentiment was also boosted by an upbeat US jobs report and receding political concerns in Italy.

The Hang Seng Index advanced 1.7 per cent, or 505.07 points, to close at 30,997.98. The Hang Seng China Enterprises Index, known as the H-share index, gained 1.9 per cent, or 229.49 points to 12,249.58.

Chinese internet conglomerate Tencent jumped 2.7 per cent to HK$415.00, contributing the most to the Hang Seng Index. It was responsible for 82 points of gains.

On mainland China, the benchmark Shanghai Composite also rose 0.5 per cent, or 16.05 points, to 3,091.19.

“In June, the stock market will continue to be dominated by external uncertainties, such as US-China trade tensions and Trump and Kim Jong-un’s proposed summit in Singapore,” said Tony Ho, head of research at China Goldjoy Securities in Hong Kong.

He added that market sentiment may be dented by the upcoming soccer World Cup in Russia, as history shows the stock market often fares badly during the tournament, known as the World Cup curse, as investor attention is diverted to the game and capital could also be routed to gambling.

Elsewhere in Asia-Pacific, stocks ended broadly higher. Japan’s Nikkei rose 1.4 per cent, and Australia’s S&P/ASX was up 0.6 per cent.

On Friday, Apple, Amazon, Microsoft, Facebook and Netflix all logged all-time closing highs, lifting the Nasdaq Composite Index higher by 1.5 per cent.

UBS recently raised Apple’s share price target from US$190 to US$210 on rising interest in iPhoneX. The stock closed at US$190.24 on Friday, giving it a market cap of US$935 billion.

Chinese internet conglomerate Alibaba Group Holding also jumped 3.2 per cent in New York.

The Dow Jones Industrial Average ended up 0.9 per cent. The S&P 500 gained 1.1 per cent after the May jobs report showed the US unemployment rate dropped to an 18-year low of 3.8 per cent, while a newly formed Italian government also eased investor concerns about spillover effect of the political turmoil.

In Hong Kong, AAC Technologies, an acoustic component supplier for Apple’s iPhones, climbed 2.7 per cent to HK$119.30.

Financial shares also shone, as AIA and HSBC rose 1.4 per cent and 0.9 per cent respectively.

Nonetheless, Chinese solar stocks plunged, after the government suspended approvals for new standard solar power projects this year.

Xinyi Solar Holdings sank 14.7 per cent to HK$2.72. Flat Glass Group, which makes solar photovoltaic glass, plummeted 21 per cent to HK$1.69.

On mainland, the solar sector also plunged. Sungrow Power Supply, and Tongwei both fell by the maximum-allowed 10 per cent.

Film and TV stocks witnessed a sharp sell-off, after the national tax bureau launched a crackdown on tax evasions in the industry, prompted by heated online discussions about actress Fan Bingbing’s earnings after her alleged employment contract was leaked.

Huayi Brothers and Zhejiang Talent Television and Film,both slid 10 per cent, while Ciwen Media dropped 6.1 per cent.