Hang Seng Index set for another 30,000 test as Alibaba surges, more China funds enter Hong Kong in record inflows

Hang Seng Index rose to as high as 29,993.47 points, less than 0.1 per cent away from the psychological level last seen on May 3, 2019

Technology stocks rally with Alibaba pacing the winners; Meituan, Tencent and bourse operator HKEX reach new highs

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A woman walks past a bank's electronic board showing the Hang Seng Index at Hong Kong Stock Exchange in Central, Hong Kong on January 19, 2021. Photo: AP

Published: 11:02am, 20 Jan 2021Updated: 5:34pm, 20 Jan 2021

Hong Kong stocks rose for a fifth day, lifting the benchmark index closest the 30,000 level for the first time since May 2019 amid a rush of mainland funds. Technology and pharmaceutical stocks rallied while Alibaba Group Holding surged.

The Hang Seng Index closed 1.1 per cent higher at a 20-month high of 29,962.47. The gauge earlier reached 29,993.47, taking it to within less than 0.1 per cent of breaking the psychological level last seen on May 3, 2019. The market has risen 10 per cent this year, the best start to a year since 1985.

The Shanghai Composite Index rose 0.5 per cent at 3,583.09 for a 3.2 per cent gain so far this month. The CSI 300 index, which tracks the biggest companies on Shanghai and Shenzhen bourses, advanced 0.7 per cent.

Given the rise of middle class and China’s economic growth, “more and more [mainland] investors also want to diversity their investment out of China,” said Tuan Huynh, chief investment officer, Europe and Asia at Deutsche Bank International Private Bank in a teleconference on Wednesday. “And one way for them to do is via the market in Hong Kong.”

Southbound funds on Stock Connect programme supported gains in Hong Kong, as new funds look to deploy cash after investor subscriptions reached record highs recently.

Mainland stock traders have spent HK$205.6 billion on Hong Kong-listed stocks in the new year through Wednesday, according to Bloomberg data. They have made another HK$20.3 billion of net purchases so far today on top of HK$26.6 billion on Tuesday.

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