Hang Seng Index tops pre-pandemic high on Alibaba, Tencent, CNOOC rally while China stocks slump by most in four months

Name: Father and son attack police officer while jumping queue at Covid-19 testing station in China
Uploaded: 2021-01-14T02:51:20.000Z
Description: Father and son attack police officer while jumping queue at Covid-19 testing station in China

Gains in Chinese tech giants lifted the Hang Seng Index above the January 22 level, a day before the Wuhan lockdown last year

Trump administration faced resistance from Treasury officials on plans to ban US investors from owning Alibaba and Tencent, reports say

Reading Time:2 minutes

Why you can trust SCMP

Bulls overrun bears in Hong Kong markets as the benchmark Hang Seng Index climbs above the level before the Wuhan lockdown a year ago that precipitated a global sell-off. Photo: Bloomberg

Zhang Shidongin Shanghai

Published: 10:51am, 14 Jan 2021Updated: 5:34pm, 14 Jan 2021

Hong Kong stocks rose, with the benchmark index recouping all the losses sparked by the coronavirus outbreak a year ago. Alibaba Group Holding and Tencent Holdings rallied after reports saying the US decided against banning US investments in two of Asia’s biggest companies.

The Hang Seng Index gained 0.9 per cent to 28,496.86 at the close trading on Thursday, taking the gauge above 28,341.04 on January 22 last year, a day before China announced the lockdown of Wuhan, the epicentre of the Covid-19 outbreak. The benchmark briefly tested that level on Wednesday, before surrendering all gains.

Mainland-listed stocks, however, slumped again. The CSI 300 Index, which tracks the biggest companies traded on Shanghai and Shenzhen bourse, crashed 1.9 per cent for the steepest pullback since September amid bubble concerns. The gauge reached the highest level since 2008 earlier this week.

Major equity markets in Asia advanced on the back of an overnight jump in US technology stocks. Treasury yields dropped from its highest level since March, after the Federal Reserve officials doused speculations that the US central bank will trim its bond-purchase programme. President-elect Joe Biden is mulling a relief package worth about US$2 trillion, CNN reported.

“Our models are now pointing to recovery and an ‘early Spring’,” according to Johanna Kyrklund, chief investment officer and global head of multi-asset investment at Schroders. “We will still need governments’ stimulus to support us while we wait for the vaccine.”

The money manager is positive on equities and recommended shifting out the “stay at home stocks” that outperformed in 2020 into the more cyclical areas of the market, it said in a note to clients.

Father and son attack police officer while jumping queue at Covid-19 testing station in China

In Hong Kong, Alibaba, the owner of this newspaper, advanced 5 per cent to HK$235 while WeChat operator Tencent gained 5.6 per cent to HK$629.50. The Trump administration dropped a plan to ban them and internet search engine Baidu, due to opposition from the Treasury department, according to Reuters and Dow Jones reports.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x