Hong Kong stocks retreat as traders lock up gains from 3-week market rally, onshore equities surge

Hang Seng Index has risen more than 10 per cent since the benchmark hit a 14-month low in January

Fewer mainland Chinese cities recorded month-on-month declines in new home prices last month, a government report shows

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Bronze sculpture of a bull seen outside the Exchange Square in Central. Photo: Winson Wong

Published: 10:45am, 23 Feb 2024Updated: 5:42pm, 23 Feb 2024

Hong Kong stocks snapped a three-day advance as traders locked up gains fuelled by market intervention and a global mania in computing chips and artificial intelligence. Equities in mainland bourses took a breather while an official report showed home prices fell at a slower pace.

The Hang Seng Index slipped 0.1 per cent to 16,725.86 on Friday, while the Tech Index weakened 0.3 per cent. The Shanghai Composite Index jumped 0.6 per cent, and the CSI 300 gauge added 0.1 per cent to cap a nine-day winning run, the longest streak since January 2018.

Tencent dropped 0.2 per cent to HK$290.80 while Alibaba Group declined 0.4 per cent to HK$74.55 and e-commerce peer JD.com tumbled 1.7 per cent to HK$93.75. Baidu’s 2.7 per cent jump to HK$109.90, and Trip.com’s 3 per cent to a record of HK$366.40, tempered losses.

Developer Longfor surged 4.7 per cent to HK$10.74 and peer China Resources Land gained 0.2 per cent to HK$25.90. New home prices in first-tier mainland cities fell 0.3 per cent in January from a month earlier, versus a 0.4 per cent drop in December, the government said. Fewer cities among the 70 tracked by authorities posted month-on-month declines, it added.

The Hang Seng Index climbed 2.4 per cent this week, a third week of advance and the longest since June last year. It has rebounded about 11 per cent from a 14-month low in January. despite a pullback in shares of Hong Kong’s biggest developers before the city unveils its budget on February 28.

“Market sentiment is clearly improving. Some investors who were firmly bearish on the market before the Spring Festival are now beginning to turn bullish,” Dongfan Ma, equity strategist at Shanghai-based independent research firm Horizon Insight, said in a note to clients on Thursday.

Stocks rallied worldwide this week, with benchmarks in the US, Europe and Japan hitting record-highs after a surge in demand for AI computing chips buoyed Nvidia’s bullish revenue forecast. The graphic-card maker has gained U$$700 billion in market capitalisation this year. Local shares also profited from Beijing’s market intervention.