Hang Seng Index rebounds as Meituan, Tencent extend winning run, investors shrug off Alibaba concerns

Iris Ouyang
·3-min read

Hong Kong stocks erased earlier losses to cap a third day of advance, as investors shrugged aside regulatory concerns about Alibaba Group Holding. Meituan and Tencent shored up the market on mainland fund purchases.

The Hang Seng Index edged up 0.2 per cent to 29,307.46 at the close, bringing the appreciation to 3.6 per cent so far this week. The Shanghai Composite Index slipped 0.5 per cent to 3,517.31.

Alibaba, the owner of this newspaper, edged up 0.4 per cent to HK$261, erasing as much as a 4 per cent drop in earlier trading. Lingering concerns about antitrust probes and “substantial uncertainties” surrounding Ant Group IPO revival overshadowed its earnings report card for the quarter ending December 31.

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Meituan surged by 4.9 per cent to record high of HK$414.20. It was the second most popular stock for southbound funds this week. Mainland funds spent HK$892.6 million in net purchases of its shares on Tuesday. Tencent was also resilient, up by 1.6 per cent to HK$736.

Among other gainers, Ping An Healthcare and Technology jumped 6.4 per cent to HK$111.40. The Chinese online health care services platform’s revenues grew 35.5 per cent to 6.87 billion yuan in 2020, beating analysts’ expectations.

WuXi Biologics fell 2.3 per cent to HK$117.60. The Chinese drug developer announced late Tuesday a plan to raise HK$13.2 billion (US$1.69 billion) by selling 118 million new shares at HK$112 each, or about 7 per cent below the market price.

“The weaker early trading was mainly due to WuXi Biologics’ share placement at a discount,” said Willer Chen, analyst at Forsyth Barr Asia in Hong Kong. Some parts of Alibaba’s report card were weaker-than-expected, although the overall market sentiment is “still okay” for now, he added.

Stocks on the mainland weakened as new data showed China’s economic recovery lost some traction in January. The Caixin Service PMI declined 4.3 percentage points to 52 in January, the lowest reading in nine months. China Caixin Composite PMI was 52.2, the lowest level since May 2020. Both, however, remained in expansion mode.

On the mainland, Shen Zhen Australis Electronic Technology surged by 731 per cent to 93.27 yuan on its debut in Shenzhen.

Stocks related to rare earth production rose. Shenghe Resources surged by the daily cap of 10 per cent. China Northern Rare Earth soared 6.3 per cent. China Minmetals Rare Earth advanced 5.1 per cent.

Stocks across major Asia-Pacific markets performed better in tandem with overnight gains in US equities on the back of strong earnings from Amazon and Google’s parent company Alphabet. Stocks in Australia added 0.9 per cent, while Japan’s Nikkei 225 gained 1 per cent. South Korea’s Kospi increased 1.1 per cent.

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