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Hong Kong stocks recover as Tencent, NetEase recoup part of US$63 billion sell-off while new China report aids sentiment

  • Tencent and NetEase recouped some of their losses from Friday’s sell-off as China softened its tone on industry policing
  • China’s industrial profits rose at an annual pace of 29.5 per cent in November, quickening from 2.7 per cent in October

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An electronic board displays the Hang Seng Index and stocks outside the Exchange Square in Central on June 30. Photo: Yik Yeung-man
Jiaxing Li
Hong Kong stocks gained as video-gaming companies rebounded after Beijing calmed jitters about tightening industry policing while game approvals rose by the most in 17 months. China’s better-than-expected industrial profits also aided sentiment.

The Hang Seng Index climbed 1.7 per cent to 16,624.84 at the local noon trading break, while the Tech Index advanced 2.6 per cent. Both indices clawed back some of the sell-off last week. The city’s financial markets were closed on Monday and Tuesday for Christmas. The Shanghai Composite Index jumped 0.5 per cent.

Tencent surged 4 per cent to HK$285 and NetEase soared 11.9 per cent to HK$136.50, after Beijing approved 105 new game titles, the most since July 2022 and said its proposed curbs on spending are not finalised. Both stocks had plunged in a US$63 billion rout on Friday, sparked by the proposed curbs on excessive game spending.

Elsewhere, Alibaba Group rose 2.7 per cent to HK$73.80 and Meituan gained 2.2 per cent to HK$78.30. EV maker BYD added 1.3 per cent to HK$205.20 while Li Auto strengthened 6.8 per cent to HK$136.90.

“We believe market concerns over a sector crackdown are overdone,” analysts at Jefferies said in a note over the weekend. The draft rules are aimed at fostering a healthy gaming sector and the market needs to monitor the outcome, they added.

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