Hong Kong stocks log best week in 6 months on Beijing’s ‘goodwill gestures’ as JD.com, NetEase, Alibaba jump 10 per cent
- Chinese tech stocks underpinned local market rally, with the sector benchmark completing its best week since early December
- Beijing heaped praises on tech leaders soon after handing down hefty fines on Ant Group, Tencent units
The Hang Seng Index gained 0.3 per cent to 19,413.78 at the close of Friday trading, bringing the rally this week to 5.7 per cent, the most since a 6.1 per cent surge in the opening days of January. The Tech Index completed an 8.4 per cent weekly gain, the most in seven months.
NetEase surged 2 per cent to HK$166.90, Tencent gained 0.8 per cent to HK$352.60, while chip maker SMIC jumped 1.5 per cent to HK$20.15. Sportswear maker Li Ning added 2.1 per cent to HK$42.30 and peer Anta Sports jumped 2.5 per cent to HK$84.50. While JD.com, Meituan and Alibaba Group erased gains on Friday, the trio logged more than 10 per cent gain this week.
The rally restored more than US$180 billion of capitalisation to the city’s stock market this week. Still, the Hang Seng Index remained 3.6 per cent lower than the start of the year. Stocks pared gains in Friday trading, after rallying as much as 1 per cent. HSBC on Friday lowered its year-end targets for the index by 13 per cent to 19,580 on weak economic recovery.
China’s top officials including President Xi Jinping and Premier Li Qiang to regulatory agencies have turned more friendly to private businesses, praising their economic contribution soon after handing down billion-dollar fines last week, seen as the culmination of years-long crackdown on tech firms.
There are “positive signs of increasing ‘goodwill gestures’ from the government to the private sector,” Patrick Pan, China equity strategist at Daiwa, wrote in a note to clients. It will be a good start for policymakers to understand the situation on the ground, and avoid “wild policy swings” over the long run, he added.
01:49
Premier Li Qiang plays up China’s economic prospects at World Economic Forum’s ‘Summer Davos’
Investors shrugged off more data showing China’s post-pandemic economic recovery is waning. Exports and imports shrank more than expected in June, while growth in the services sector cooled, reports this month showed.