Hong Kong stocks jump as Alibaba, Meituan rebound from biggest tech sell-off in seven weeks

The Hang Seng Index rose by almost 1 per cent as investors bought the dip after the biggest sell-off in technology giants since mid-November

Asian stocks rallied as Nikkei 225 reached a 29-year high, boosted by approval to US$2.3 trillion stimulus package in the US

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An electronic board showing the Hong Kong share index on Friday, December 18, 2020. Tech stocks provided the biggest swings in recent trading amid regulatory actions. Photo: AP

Published: 10:47am, 29 Dec 2020Updated: 5:32pm, 29 Dec 2020

Hong Kong stocks rallied as Alibaba Group Holding, Tencent Holdings and Meituan rebounded, halting the biggest sell-off in tech stocks in seven weeks amid concerns about China’s clampdown on domestic monopolies.

The Hang Seng Index closed almost 1 per cent higher at 26,568.49 for its biggest rally since December 16. A gauge tracking 31 of the bourse’s biggest technology companies jumped 2.6 per cent. The Shanghai Composite Index declined 0.5 per cent to 3,379.04, after fluctuating between gains and losses earlier.

Alibaba Group Holding surged 5.7 per cent to HK$222 from near a six-month low while Tencent added 2.2 per cent to HK$530.50 and Meituan rose 5.2 per cent to HK$273.40. The ATM trio bore the brunt of bashing on Monday which sent the Hang Seng Tech Index to a 4.3 per cent loss, its biggest slump since November 11. ZTE Corp surged by 7.8 per cent to HK$19.44.

Investors dumped Alibaba, the owner of this newspaper, and some of its listed affiliates and industry peers on Monday after Chinese regulators tightened its oversight and controls on internet-platform operators and stepped up efforts to tackle so-called “disorderly capital expansion” in the industry.

“The declines were too big for the past two days, traders have bought the dips on expectation that they will rebound,” said Castor Pang, head of research at investment services firm Core Pacific-Yamaichi. “Concerns [over Beijing’s sweeping antitrust campaign] have not been reduced.”

The clampdown appears to bring a sobering end to a year of frenzy after investors booked huge profits betting on the power and dominance of technology companies during the coronavirus pandemic. The Hang Seng Tech Index, launched in July, has rallied about 70 per cent based on simulated year-to-date performance, while the benchmark Hang Seng Index fell by 5.8 per cent.