Tech stocks soar in Hong Kong as bullish mainland funds scoop up bargains

Hang Seng Tech Index jumped 6.9 per cent, capping its best rally in a month as Alibaba halted a nine-day slump to record low

Mainland Chinese funds bought HK$2.2 billion (US$279.5 million) worth of local stocks on Tuesday, the most in two weeks

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Stock bulls came out charging on Tuesday, lifting the Hang Seng Index to its best gain in four weeks. Photo: Bloomberg

Published: 10:37am, 24 Aug 2021Updated: 5:19pm, 24 Aug 2021

Hong Kong stocks rallied by the most in four weeks as traders scooped up bargains in Alibaba Group Holding and other Chinese tech companies after the local market hit a 10-month low last week.

The Hang Seng Index rose 2.3 per cent to 25,677.99 at the close of Tuesday trading, its biggest advance since July 29, adding to a 1.1 per cent on Monday. The market slipped into a bear market last week with a loss of more than 20 per cent from its February peak.

The 30-member Hang Seng Tech Index surged 6.9 per cent, the most in a month. The Shanghai Composite Index added 1.1 per cent after the central bank said that it will stabilise credit supply to support the economy and smaller companies.

Alibaba Group Holding, the owner of this newspaper, jumped 9.5 per cent to halt a nine-day losing streak that sent the stock to an all-time low. Meituan and Tencent Holdings rallied by at least 8 per cent. JD.com surged by a record post-earnings report.

Mainland investors returned to the local market with HK$2.2 billion (US$279.5 million) of net purchases through the Stock Connect link on Tuesday, the biggest inflows in two weeks.

Local stocks rebounded on Monday as traders deemed last week’s 5.8 per cent sell-off, the biggest slump in 17 months, as excessive. The 14-day relative strength index readings for both the Hang Seng Index and the Hang Seng Tech Index dropped below 30 last week, signalling stocks were oversold and poised to advance. A switch to growth stocks from value plays were also seen.

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