Hong Kong stocks complete third week of gains in biotech-driven rally while auto stocks fuel markets in mainland China

Hang Seng Index rose 0.4 per cent for a third weekly advance to highest level since March, auto stocks powered Shanghai Composite Index

Top infectious disease experts in Hong Kong warned a fourth wave of Covid-19 infections has started

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A bull statue seen outside the Shenzhen stock exchange. Biotech and auto stocks provided the catalysts to Hong Kong and China benchmarks this week. Photo: Reuters.

Published: 11:05am, 20 Nov 2020Updated: 6:10pm, 20 Nov 2020

Hong Kong and China markets rose on Friday, sending benchmark indexes to a winning week as biotech stocks enjoyed renewed optimism from progress in Covid-19 vaccine developments. Auto stocks surged in mainland China on the back of further state incentive for the sector.

The Hang Seng Index rose 0.4 per cent to 26,451.54, taking the week’s advance to 1.1 per cent. The Hang Seng Tech Index of top 30 sector stocks added 1.2 per cent.

Alibaba, the owner of this newspaper, gained 3.2 per cent to HK$253. Tencent increased 2.6 per cent to HK$588. Food delivery giant Meituan, which will become a constituent of the Hang Seng Index from December 7, advanced 3.5 per cent to HK$304.20. Geely Auto rose 2 per cent to HK$23.10, hitting a record-high during the week.

The local benchmark has appreciated 9.7 per cent in a three-week rally, lifting the market to the highest level since early March. WuXi Biologics climbed 5.6 per cent to HK$83.35 while Sino Biopharmaceutical added 1.1 per cent to HK$7.88.

The market took a bullish turn this month after encouraging results from late-stage trials of vaccine candidates produced by Pfizer, BioNtech and Moderna, which showed more than 90 per cent effective in preventing Covid-19 infections. That enthusiasm was tempered by rising cases globally and locally.

Hong Kong recorded the most daily cases in around three months on Friday, with at least 66 confirmed cases. Health experts warned that a fourth wave of coronavirus infections has started as caseload increased amid local transmission in recent days. In the US, tougher lockdowns are causing jitters in the market even as drug makers attempted to rush through their Covid-19 vaccine candidates for emergency use.