Hong Kong stocks approach six-week high on Alibaba tailwind while Chinese coal producers slump

Hang Seng Index closed near a six-week high on speculation tech crackdown is softening as Jack Ma made his first overseas trip in more than a year

Coal producers slumped after an overnight plunge in futures contracts, as China considers intervening to stem runaway prices

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An electronic board showing the Hang Seng Index near the Exchange Square in Central, Hong Kong in December 2020. Photo: AP

Published: 10:36am, 20 Oct 2021Updated: 5:03pm, 20 Oct 2021

Hong Kong stocks reached the highest level in almost six weeks, aided by a rally in Alibaba Group Holding, amid speculation on its ties with Chinese regulatory authorities. Coal producers fell after an overnight plunge in the commodity.

The Hang Seng Index gained for a fourth day, adding 1.4 per cent to 26,136.02 on Wednesday, the highest since September 10. The tech benchmark appreciated 2.7 per cent as the three biggest constituents advanced by at least 2.1 per cent.

Alibaba, the owner of this newspaper, surged 6.7 per cent to HK$175.80. Co-founder and former chairman Jack Ma has travelled to Europe for a study tour on agriculture, according to a person familiar with his itinerary, marking his first overseas trip in more than a year. The stock has jumped almost 24 per cent this month, reversing a slide last quarter.

Ma’s travel, about a year after China halted Ant Group’s stock offering, fanned speculation China’s regulatory authorities are softening a crackdown on the broader technology industry. Alibaba Health Information Technology surged 13.5 per cent to HK$12.62. Tencent gained 2.1 per cent to HK$509.50 while Meituan added 2.9 per cent to HK$293.80.

“In the short term, regulatory risks have subsided to some extent,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “Whether they will continue to gain depend on the upcoming earnings reports,” adding that investor sentiment has stabilised.

In China, the Shanghai Composite Index closed 0.2 per cent lower at 3,587. Major coal producers tumbled after futures on thermal coal prices plunged overnight. The government said late Tuesday that it was looking to intervene and stem surging prices following an energy supply crisis.