Hong Kong stocks climb out of bear market as Tencent, Meituan power recovery amid oversold signals
- Hang Seng Index closed 1.1 per cent higher as technical gauges signalled the market was oversold and poised to rebound
- Tencent, Meituan and Alibaba Health recouped some of last week’s big losses
The Hang Seng Tech Index added 2.1 per cent. Tencent Holdings rallied 1.8 per cent to HK$433.20 and Meituan rose 1.1 per cent to HK$195.50. NetEase surged 5.7 per cent while Xiaomi gained 3.8 per cent.
The technical readings on both the Hang Seng Index and Hang Seng Tech Index dropped below the 30-point threshold on Friday, based on their 14-day relative strength indicators. That signalled the slide last week was overdone.
Today’s rebound was also supported by short covering as traders seek to close out their positions and return borrowed securities, said Carl Cai, analyst at SPDB International in Hong Kong. “But the sluggish investor sentiment hasn’t fundamentally changed as they are still worried about regulatory uncertainties.”
Healthcare-related stocks saw large gains with WuXi Biologics soaring by 7.5 per cent and Alibaba Health Information Technology surging by 6.1 per cent. CSPC Pharmaceutical Group added 3.6 per cent. They slumped as a group last week because of concerns over regulatory crackdown.