Hong Kong stocks surge as some funds turn bullish on Alibaba and tech peers while Kuaishou, Xpeng, Swire rally before index review

Hang Seng Index logged a third day of rally as the Year of the Dragon delivered on its early promise

Kuaishou, Xpeng, JD Logistics and Swire Properties surged; they are prime candidates for benchmark index inclusion, according to CICC analysts

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People walking outside the Exchange Square in Central, Hong Kong with tickers showing stock prices on December 7, 2023. Photo: Li Jiaxing

Published: 11:00am, 16 Feb 2024Updated: 4:52pm, 16 Feb 2024

Hong Kong stocks logged the biggest jump in almost two weeks after reports showed some fund managers have turned upbeat on China’s biggest technology companies as valuations cheapened. Xpeng, JD Logistics and Kuaishou rallied on speculation they will join the city’s benchmark index from next month.

The Hang Seng Index advanced 2.5 per cent to 16,339.96 on Friday, bringing the gain this week to 3.9 per cent. The Tech Index jumped 3.7 per cent. Both gauges marked the best rally since February 6. Financial markets in mainland China will reopen on Monday after a week-long Lunar New Year holiday.

Alibaba Group climbed 2.4 per cent to HK$73 while e-commerce peer JD.com jumped 4.9 per cent to HK$95.75 and Tencent added 2.2 per cent to HK$291.80. Sportswear maker Li Ning added 4.9 per cent to HK$21.25 and EV maker Li Auto added 5.8 per cent to HK$126.70.

Casino operator Sands China rallied 4.9 per cent to HK$24.50before its annual earnings report today. HSBC rose 1 per cent to HK$61.95 before releasing its 2023 report card next week.

Michael Burry of the Big Short fame, made Alibaba and JD.com among his fund’s top holdings last quarter, according to its regulatory filing this week. Hedge funds Renaissance Technologies, Saba Capital and Point72 added new positions in Alibaba, as did Canada Pension Plan Investment Board and Oaktree Capital Management.

Alibaba Group, the owner of the South China Morning Post, has risen 11 per cent in the past one month. Still, the stock has lost 26 per cent of its value over the past one year amid earnings disappointment, industry rivalry and regulatory headwinds at home.

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