Hong Kong stocks gain as tech index scales three-week high despite regulatory overhang
- A rebound in Hang Seng Tech Index gained traction even as clampdown persists and China’s data privacy law came into force
- Bilibili and NetEase climbed by at least 6 per cent as bargain hunting set in after a key sector valuation slipped to lowest on record
The Hang Seng Index added 0.6 per cent to 26,028.29 at the close while the tech benchmark jumped 1.3 per cent to a three-week high with Bilibili and NetEase leading the rally with a 6 per cent advance. China’s Shanghai Composite Index gained 0.7 per cent.
Dip buyers have been loading up on Chinese technology stocks as sentiment and fundamental yardsticks hit new lows. The 30 companies in the Hang Seng Tech Index traded at an average price-earnings of 15.1 times on August 20 after months of sell-off, according to Bloomberg data, a record low.
“It is still premature to say that the market has bottomed while policy uncertainty remains one of the largest headlines for offshore Chinese equities,” analysts led by Wang Hanfeng at China International Capital Corp wrote in a note to clients. The market has priced in much of the recent negative factors and an incremental improvement in those concerns could trigger a decent rebound, it added.
Still, mainland investors sold HK$116.3 million (US$15 million) worth of Hong Kong stocks through the Stock Connect link for a sixth straight day of net outflows on Wednesday, stock exchange data showed. underscoring concerns over regulatory backlash. Mainland investors were net buyers of HK$5.8 billion worth of Tencent stock in August.