Hong Kong stocks advanced on Wednesday as traders piled into technology shares, while China markets ended mixed ahead of a key US tariff deadline.
The Hang Seng Index reversed early losses and ended 0.8 per cent, or 208.81 points, higher at 26,645.43.
In China, the Shanghai Composite Index added 0.2 per cent to 2,924.42 by the close, extending its winning streak to five days. Meanwhile, the Shenzhen Component Index declined by 0.6 per cent to 9,852.71. The ChiNext Index of start-ups listed in Shenzhen dropped 0.9 per cent.
An afternoon rally in the Hong Kong market could be the result of fund managers pushing up stock prices at the end of the year for performance reports, according to Louis Tse Ming-kwong, managing director of VC Asset Management.
“There’s a bit of year-end window dressing going on after the market has been so down for the past six months because of tariffs and protests,” Tse said. “The market is now focusing on those laggards, [shown by] quite some buying into Xiaomi,” he added.
Investors’ enthusiasm for Chinese technology shares is rising, as China shifts to advocating the use of domestic products and parts in the face of an uncertain US market, Tse said.
Electronics and technology shares advanced broadly, lifted by positive sentiment over increasing demand for domestic 5G smartphones in China.
Phone and home appliances maker Xiaomi Corp jumped 8.5 per cent to HK$9.99, recording its biggest daily gain since July 2018. The stock has performed poorly since its listing in July last year, and is trading 41 per cent lower than its initial public offering price.
The gains on Wednesday came after Redmi, a sub-brand, unveiled on Tuesday in Beijing that its new Redmi K30 series smartphone will go on sale in January. Priced at least 1,999 yuan (US$284), it will be the cheapest 5G phone in the market. It will help Xiaomi regain a greater market share in the 5G era, Chinese investment bank CICC said in a report.
Separately, smartphone component producer AAC Technologies also added 5.6 per cent to HK$64.75, for its highest level since October 2018.
In China, broad gains by carmakers lifted the Shanghai market. Changan Automobile, based in the southwestern city of Chongqing, jumped by the daily limit of 10 per cent to 9.09 yuan, after reporting a 13 per cent surge in November sales from the same period last year.
Investors were hopeful about a rebound in China’s car market, which has suffered an extended period of slowdown since last year. A gauge of 22 carmakers listed in Shenzhen and Shanghai rose 2 per cent on Wednesday.
Electronics stocks weighed on the Shenzhen market, as investors took profits in wireless headset component suppliers. Earphone manufacturer Yingtong Telecommunication and Shenzhen Rapoo Technology, a maker of wireless peripheral equipment, plunged by the daily 10 per cent limit. A gauge of wireless earphone related stocks weakened by 2.6 per cent.
More from South China Morning Post:
- Hong Kong market dips while China stocks eke out small gains, as investors remain in ‘observation mode’
- More pain for Hong Kong stocks in 2020 as smart money bets on China upside, analysts say
- Hang Seng, China stocks trapped in range-bound trading amid caution over trade deal
This article Hong Kong market gains as Xiaomi records rare rebound on new 5G phone first appeared on South China Morning Post