Hong Kong, Chinese stocks end week on winning note on outlook for fund inflows, Tencent slammed by heightened US scrutiny
- Hang Seng Index narrows losses while Shanghai Composite Index completes first winning week in three
- Tencent slammed by heightened US scrutiny, with investors still edgy on US-China tensions, says Gordon Tsui, head of securities association
The Hang Seng Index advanced 0.5 per cent to 24,455.41 on Friday, narrowing its losses this week to 0.2 per cent. Financial and healthcare stocks led the charge, while technology stocks within the Hang Seng Tech Index rose 2.7 per cent from a week earlier.
The Shanghai Composite Index rose 2.1 per cent to 3,338.09, hauling the gauge to a 2.4 per cent gain, the most since end-July. Northbound capital flow, from offshore to onshore, recorded a net inflow of 9.474 billion yuan, the highest level since July 7, according to Wind Information.
“Capital has flowed into the Hong Kong market, supporting stocks,” said Gordon Tsui, chairman of Hantec Pacific and president of Hong Kong Securities Association. “On the other hand, mainland-based new economy stocks, such as Ant Group, are lining up for listings, helping market sentiment.”
Still, stocks may struggle to keep gains under the cloud of US-China tensions and sanctions in the coming weeks, he added, as showcased by a slump in Tencent Holdings, the owner of WeChat social media app.
Tencent dropped 0.7 per cent after earlier falling as much as 2.6 per cent. The Trump administration has sent inquiries to US firms in which Tencent invested in, according to a Bloomberg News report. Tencent and other Chinese technology stocks have come under pressure after Washington targeted Chinese video sharing app TikTok on security concerns.
Among notable gainers, healthcare and financial stocks rallied with biopharmaceutical firm BeiGene surging 13.2 per cent and WuXi Biologics advancing 3.6 per cent. China Life Insurance rising 4.7 per cent.
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Markets on both sides of the border has been on the slippery slope this September as the IPO frenzy dissipated. A slew of large initial public offerings had fuelled an almost 10 per cent rally in the Hang Seng Index from June to August.
More large-scale IPOs are still in the pipeline. Apart from Ant Group, other market leaders like logistics firm ZTO Express, carmaker Geely Auto and JDHealth, for examples, have announced their stock offering plans.
On the mainland, Kweichow Moutai, the world’s most valuable liquor stock, added 1.5 per cent. Apple AirPod maker Luxshare Precision rose 3.8 per cent. Three stock debutants also chalked up heft gains.
Yantai North Andre Juice Company surged 44 per cent to 10.94 yuan in Shanghai, while iRay Technology rose 33.9 per cent to 160.1 yuan. Fulu Holdings, which provides virtual goods and services, gained 4.7 per cent to HK$9.32 in Hong Kong.