Hang Seng Index fails to sustain above 30,000 level on overheating concerns as technology stocks lose steam

Hang Seng Index surpassed 30,000 points for the first time since May 2019 but failed to close above that psychological level

Purchases by mainland mutual funds may continue through Lunar New Year next month as investors weigh outlook on global economic recovery

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There was no fireworks to greet the New Year in Hong Kong. But mainland traders are lighting up the local stock market with record purchases, sending the Hang Seng Index above 30,000 points for the first time since May 2019. Photo: Sam Tsang

Published: 10:08am, 21 Jan 2021Updated: 11:06pm, 21 Jan 2021

Hong Kong stock advanced as traders greeted the inauguration of President Joe Biden by driving the benchmark index past the 30,000-point level for the first time since May 2019, before surrendering gains in late-trading.

The Hang Seng Index slipped 0.1 per cent to 29,927.76 at the close of trading, after mounting a third attempt at 30,000-point level this week. The gauge earlier rose to as high 30,135.50, a level not seen since May 2019, before a pullback in technology stocks set in on overheating concerns.

The Hang Seng Tech Index, which tracks 31 of the biggest players in the sector, shed 0.8 per cent. Xiaomi slid 3.1 per cent to HK$30.95 while Alibaba Group Holding, the owner of this newspaper, declined 2.4 per cent to HK$258.60. Tencent surged past HK$700 before easing to HK$682.50 for a 0.4 per cent gain.

Stocks in mainland China gained. The Shanghai Composite Index added 1.1 per cent to 3,621.26 while the ChiNext tech board rose 2.5 per cent to 3,283.72. Both climbed to the highest level in at least 4.5 years. The CSI 300 index, which tracks the biggest companies on Shanghai and Shenzhen bourses, added 1.6 per cent.

Despite today’s setback, the Hang Seng Index has appreciated almost 10 per cent since the last trading day of 2020, marking the market’s most bullish start to a year since 1985. Sino Biopharmaceutical surged 4 per cent while HSBC added 2.5 per cent. Bourse operator Hong Kong Exchanges & Clearing climbed 1.6 per cent on the back of mainland fund inflows.