Hong Kong shares boosted by Alibaba, Meituan; gains capped as services activity slows

The Hang Seng Index is clawing back ground after losing 2 per cent in June, helped by mainland investors who are focused on high-dividend yielding shares

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Published: 11:04am, 3 Jul 2024Updated: 5:18pm, 3 Jul 2024

Hong Kong stocks advanced for a third straight day as heavyweight Alibaba Group sparked a tech rally, while mainland investors lent support piling into high dividend stocks. Gains were tempered by data that showed slowing momentum in service activity.

The Hang Seng Index closed up 1.2 per cent to 17,978.57 on Wednesday after briefly topping the 18,000 level, with the Tech Index rallying 2.5 per cent in a rebound from two-month lows. The Shanghai Composite Index declined 0.5 per cent.

E-commerce group Alibaba rallied 2.5 per cent to HK$72.20, its best gain in two weeks, after the company said it rewarded shareholders with US$5.8 billion in share buy-backs last quarter. Food delivery platform Meituan jumped 4.3 per cent to HK$117.10 and search engine operator Baidu jumped 2.7 per cent to HK$86.20, while electric vehicle maker jumped 5.4 per cent to HK$77.75.

Risk appetite was strong after US Federal Reserve Chair Jerome Powell said the world’s largest economy is back on a “disinflationary path”, a comment which was interpreted as suggesting that the US central bank may launch a rate easing cycle later this year.

“Sentiment is stabilising following the consolidation” from a peak in May, analysts at Huatai Securities said in a note on Wednesday. Still, the market is torn between those who feel the worst is over and those who expect conditions are about to get worse. However, southbound flows should lend support to the market, they added.

The Hang Seng Index is clawing back ground after losing as much as 9.8 per cent since May 20, as mainland investors focused on high-dividend-yielding shares in Hong Kong amid a sluggish stock market at home.

Hong Kong shares boosted by Alibaba, Meituan; gains capped as services activity slows

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}The Hang Seng Index is clawing back ground after losing 2 per cent in June, helped by mainland investors who are focused on high-dividend yielding shares

The Hang Seng Index is clawing back ground after losing 2 per cent in June, helped by mainland investors who are focused on high-dividend yielding shares