South China Morning Post
Advertisement
Advertisement
Hang Seng Index
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
People walking past a large stock screen in Shanghai. China’s services sector grew in September, 2021 aiding buying sentiment as mainland markets reopen for trading after the National Day. Photo: EPA-EFE
BusinessMarkets

Hong Kong stocks log second winning week on Alibaba, tech rally as China services report aids sentiment

  • Stocks rose on Friday to complete the first back-to-back weekly gain in a month; Alibaba rallied for a third day from record low
  • China’s services sector expanded last month from a slump in August, according to Caixin/Markit PMI index
Hang Seng Index
Cheryl Heng
Cheryl Heng
Why you can trust SCMP
Hong Kong stocks completed a second week of advance on the back of Big Tech rally as a private report showing China’s services industry expanded significantly last month buoyed risk appetite.
The Hang Seng Index climbed 0.9 per cent to 24,837.85 from a week ago as Alibaba Group Holding rallied for a third day from an all-time low. The benchmark closed with a 0.6 per cent on Friday. The Shanghai Composite Index added 0.7 per cent as the market reopened after a five-day trading break due to a holiday.
The Hang Seng Tech Index advanced 0.3 per cent, bringing the rally this week to 1.4 per cent. Alibaba rose after its American depositary shares rallied 8.3 per cent in overnight US trading amid efforts to improve US-China ties while some investors saw value after the tech benchmark lost almost half of its value since February.
An index tracking China’s services industry increased last month to 53.4 from 46.7 in August when activity slumped to the lowest level since the height of the Covid-19 pandemic, according to the Caixin/Markit PMI report published on Friday.
The Hang Seng Index has taken a beating in the past four months, with almost a US$1 trillion erosion in market capitalisation since May. Beijing’s clampdown on the private businesses was followed closely by fears of contagion from China Evergrande’s debt crisis that sent the tech index to its lowest point since inception.

Alibaba, the owner of this newspaper, rose 5.6 per cent to HK$155.60 while its health care information unit surged 4.4 per cent as investors scooped up beaten-down Chinese tech stocks. Tencent Holdings and Meituan jumped at least 2.1 per cent.

“The uncertainty surrounding the nature, timing, and extent of future regulations justifies lower valuations in these [tech] stocks relative to history,” BCA Research said in a report on Friday. “Thus, any bounce from oversold levels is likely to be short-lived.” Instead of adding more risk, opportunity to gain exposure, the upturn should be seen as a chance to sell, it added.

04:01

Chinese manufacturing thrown into disarray as country's electricity crisis rolls on

Chinese manufacturing thrown into disarray as country's electricity crisis rolls on
Shares of Evergrande and its property management unit remained halted pending an announcement, giving the market some breather from a sell-off related to its cash crunch. Its car-making unit Evergrande NEV gained 2.4 per cent to HK$3.44.

Elsewhere, Hong Kong developers surrendered some of their gains from Thursday. Longfor Group retreated 2.8 per cent while Country Garden and Hang Lung Properties fell at least 1.3 per cent.

Markets in Asia-Pacific advanced in reaction to news the US averted a shutdown related to debt ceiling issues. The Japanese and Australian benchmark rose 1.3 per cent and 0.9 per cent respectively. South Korean equities were down 0.1 per cent.

Post