Alibaba’s 11 per cent surge lifts Hong Kong tech index while China Eastern slips after air crash, grounded jets
- Alibaba expanded its stock buyback programme amid a slump that has erased about two-thirds of its value from record high
- China Eastern Airlines slipped as much as 7.3 per cent after grounding its Boeing jets following a domestic air crash on Monday
The Hang Seng Index surged 3.2 per cent to a two-week high of 21,889.28 at the close of Tuesday trading. The Tech Index jumped 5.4 per cent, while the Shanghai Composite Index added 0.2 per cent.
Local stocks appear to be holding up after Premier Li Keqiang on Monday said China will use policy tools to keep credit expansion at a reasonable pace and that will avoid measures that will weigh on market sentiment.
“We suggest that in the early stage of a rebound, bargain hunt for oversold technology giants, and collect leading property and infrastructure companies that benefit from growth stabilisation and financial stabilisation policies,” said Cliff Zhao, a strategist at CCB International.
Alibaba boosted the size of its buyback after spending 51 per cent of its US$15 billion buyback allocation last year without success in arresting the price slump. The stock lost almost two-thirds of its value from an all-time high in October 2020 amid Beijing’s regulatory crackdown and US delisting concerns.
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Boeing 737 plane crashes in China’s southern Guangxi with 132 people on board
China Eastern shed 2.6 per cent to HK$2.68 after its passenger plane crashed in the southern province of Guangxi. Its Shanghai-traded stock tumbled 6.2 per cent to 5.34 yuan.
Rival Air China lost by as much as 6.1 per cent before reversing the loss to close 1.4 per cent higher at HK$5.66 and China Southern Airlines added 2.2 per cent to HK$4.58, erasing an intraday loss of as much as 3.6 per cent.
Elsewhere, traders are keeping a close watch on the earnings season as seven companies including Xiaomi Corp, WuXi Biologics and Anta Sports prepare to report on Tuesday. Tencent will be the highlight on Wednesday.
Almost half of the 66 Hang Seng Index members have released their annual reports, posting an average 18.6 per cent growth rate, according to Bloomberg data. That beat analysts’ projections by 0.1 per cent, the data showed.
Hong Kong & China Gas tumbled 14 per cent to HK$9.98 after full-year earnings missed consensus estimates, and the utility scrapped a bonus share issue for the first time since 2008. JPMorgan and Daiwa downgraded their stock rating to a sell.
Markets in Asia were steady as traders digested hawkish comments by the Federal Reserve. Fed Chair Jerome Powell said the US central bank was prepared to raise interest rates by a half percentage-point at the next policy meeting if needed.
The Fed raised its target rate by 25 basis points last week in the much anticipated lift-off, and signalled six more such moves this year.
