Hong Kong stocks hit four-week high as Alibaba, Meituan soar on bets antitrust crackdown against Big Tech is ending

Meituan’s US$533 million fine is seen as a relief by market participants against expectations for a billion-dollar penalty

Hang Seng Index reached the highest level since September 14, recouping some of the US$1 trillion sell-off since the end of May

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Bronze sculptures of bulls outside the Exchange Square in Central, Hong Kong. Photo: Warton Li

Published: 10:43am, 11 Oct 2021Updated: 5:03pm, 11 Oct 2021

Hong Kong stocks rallied to near a four-week high as investors bet the worst is ending on tech sector crackdown following the end of a regulatory probe into Meituan.

The Hang Seng Index jumped 2 per cent to 25,325.09 at the close of Monday trading, taking the gauge to the highest level since September 14. The Hang Seng Tech Index surged 3.2 per cent while China’s Shanghai Composite Index slipped less than 0.1 per cent.

Meituan, the nation’s biggest on-demand delivery service firm, contributed to almost 40 per cent of the increase in the Hang Seng gauge as the company accepted a US$533 million fine and put behind its brushes with the state antitrust regulator. Alibaba Group Holding and Tencent Holding gained at least 3 per cent.

“With the result of the antitrust investigation out of the way, the policy risk has diminished,” said Zhang Liangwei, an analyst at Soochow Securities in Shanghai. “There’s no further bad news on that front.”

Sentiment on China’s technology stocks has improved this month after Beijing rolled out a raft of measures to rectify industry excesses, and traders scooped up values after some US$1 trillion sell-off in Hong Kong since May. The Hang Seng Tech Index is valued at 19.2 times earnings, rebounding from a record-low multiple of 15.2 times at end-August, according to Bloomberg data.