Hong Kong stocks gain, as Asia-Pacific stocks end mixed; Ping An Good Doctor, Ali Health soar
- Jefferies upgrades Chinese airlines listed in Hong Kong to ‘buy’
- US equity futures gain, boosting sentiment
Hong Kong stocks advanced Wednesday while other Asia benchmarks finished mixed, as US futures rose despite continued turmoil in the oil sector. Ping An Good Doctor and Alibaba Health Information and Technology soared.
Overnight, US equity markets tumbled on concerns about the world’s oil glut, even as the US Congress moved quickly on toward approval of a US$484 billion bill to help small businesses and hospitals, and a few states started on the path to loosening lockdown restrictions on citizens and businesses.
The coronavirus, which has now killed more than 177,000 people, has upended industries like airlines and hotel chains. But it also is boosting others, including those new economy stocks tied to the internet.
Ping An Good Doctor has soared 93 per cent in less than five weeks, while Ali Health has gained 70 per cent in just over four weeks.
The Hong Kong market has effectively split between stocks hammered and not expected to rebound soon – such as airlines and casinos – and Chinese new economy stocks, such as those focused on e-commerce and online delivery or workplace cloud services, says Alex Wong, director of asset management at Ample Capital.
The Hang Seng Index closed with a 0.4 per cent gain. Ping An Good Doctor and Alibaba Health Information Technology, China’s online health care platforms, continued their spectacular runs.
The investment bank said Chinese airlines are benefiting from historically low oil prices as the government has barred them from buying crude future contracts. Jefferies estimates that losses will narrow due to a strong rebound in air cargo yields and the advantage of Chinese airlines’ no hedging policy.
The Shanghai Composite Index started with declines, but closed ahead 0.6 per cent.
In addition to the virus, earnings season is in full swing, and investors are especially watchful for signals by companies about how they will dig their way out of virus damage going forward.
Elsewhere in Asia-Pacific markets, investors remained concerned about the virus’ impact on local economies.
Japan’s Nikkei 225 declined 0.7 per cent, extending its 2 per cent loss on Tuesday. It dropped below the 19,000 line for the first time in two weeks at the open.
South Korea’s Kospi gained 0.9 per cent, recouping some of yesterday’s 1 per cent loss. The tech-heavy Kosdaq rose 1 per cent, after declining 1.4 per cent on Tuesday.
In Australia, which is battling its worst recession in decades, the S&P/ASX200 finished flat, after falling 2.5 per cent the day before.
New Zealand’s S&P/NZX50 retreated 1.1 per cent, after a 2.1 per cent decline on Tuesday.
Singapore’s Straits Times Index rose 0.1 per cent, after a 1.7 per cent loss on Tuesday. The country extended its coronavirus measures to June 1, closing more workplaces.
