Hong Kong stocks overturn losses as Meituan, Alibaba rally while traders shrug off Shanghai lockdown concerns
- Authorities in Shanghai ordered a four-day lockdown from Monday in the Pudong New Area district, home to about 5.7 million people, to contain an outbreak
- Measures likely to disrupt operations at container port, international airport, Tesla’s Gigafactory and facilities owned by chip maker SMIC, among others
The Hang Seng Index advanced 1.3 per cent to 21,684.97 at the close of Monday trading, while the Tech Index jumped 2.6 per cent. Meanwhile, the CSI 300 Index slid 0.6 per cent, adding to a 2.2 per cent loss last week, while the Shanghai Composite Index lost as much as 1 per cent.
Meituan jumped 11.6 per cent to HK$150.60 as its fourth-quarter revenue beat expectations and sequential losses narrowed. Alibaba Group Holding, the owner of this newspaper, and Tencent each gained more than 2.8 per cent. Oil producers advanced, with Sinopec and CNOOC rising at least 3.7 per cent.
The lockdown is “highly likely to disrupt the city’s commercial activity,” said Bruce Pang, head of research and macro strategy at China Renaissance Securities. “In the long run, we expect China to continue to make its Covid-19 response more scientific and targeted, leading to a more softened policy stance, flexible measures and gradually looser restrictions.”
Chinese stocks are “still on sale,” according to analysts at Goldman Sachs. While the coast is not entirely clear, “the low has been seen,” they added in a March 27 report to clients. Before today, the Hang Seng Index’s 66 members traded at a record 13 per cent discount to book value, according to Bloomberg data.
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Locked down in Shanghai: China’s biggest city grapples with its worst Covid outbreak since 2020