Hong Kong stocks retreated, ending a three-day rally as investors turned cautious over a rapid jump in prices of technology stocks. Alibaba Group Holding advanced while oil companies bounced with crude prices at more than one-year high.
The Hang Seng Index slipped 0.7 per cent to 29,113.50 on Thursday as losses deepened in afternoon trading. The Shanghai Composite Index declined 0.4 per cent at 3,501.86.
Tech companies led Thursday’s slump, with the Hang Seng Tech Index sliding 2.3 per cent. Xiaomi was the biggest loser, falling 4.8 per cent to HK$27.55. Sunny Optical declined 4.2 per cent to HK$216.40 and Meituan tumbled 3.2 per cent to HK$401.
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Mainland fund inflows into Hong Kong eased to HK$12.4 billion (US$1.6 billion) on Wednesday from HK$17.3 billion on Tuesday, according to stock exchange data. Some HK$239.8 billion worth of stocks changed hands on Thursday, compared with almost HK$287 billion when the Hang Seng Index closed above the 30,000 threshold for the first time since May 2019.
“Everybody wants to get in, but just being cautious ahead of the Lunar New Year holiday next week,” said Louis Tse Ming-kwong, managing director of Wealthy Securities. Lower trading turnover in recent days means “people are reluctant to buy near the 30,000 level and are more likely to sell into strength,” he added.
Investors were also watching out for market volatility caused by recent wild fluctuation of stocks chased up by retail traders, who used internet chat forum such as Reddit to drive up stocks shorted by hedge funds, Tse added. Hong Kong’s market regulator said on Wednesday it was on alert for `pump-and-dump’ tactics in the market.
Most stocks in Asia-Pacific markets also declined. Benchmarks in Australia, South Korea and Japan fell by 0.9 per cent to 1.4 per cent.
Some investors may be taking money off the table, locking up substantial gains in Hong Kong ahead of the Chinese Spring Festival from February 12. Geely Auto declined 2.2 per cent, after rallying by 77 per cent last year. HKEX, the bourse operator that surged 73 per cent last year, fell 1.9 per cent.
Traders have their attention focused on the gray market for Kuaishou Technology, Hong Kong’s most-popular stock offering that will begin trading on Friday. The retail offering of Chinese short-video app operator to Hong Kong investors was more than 1,200 times covered, luring HK$1.28 trillion of bids.
Alibaba advanced 0.5 per cent to HK$262.20, offering a bright spark in the market. Its fintech affiliate Ant Group reached deal with China’s financial regulators on a business overhaul, according to sources, following an antitrust clampdown in payments operators.
Separately, analysts at Citigroup, Deutsche Bank, Macquarie among others raised their price targets for the stock after its better-than-expected third-quarter earnings, according to data compiled by Bloomberg. The Hangzhou-based e-commerce group, which owns this newspaper, is also taking orders for a US$5 billion bond offering.
Oil giants rallied. Sinopec added 0.5 per cent and PetroChina advanced 0.4 per cent. Crude jumped to about US$56.05 a barrel in recent trading, the highest since January 2020, after OPEC+ members pledged to trim excess supply in the market.
On the mainland, shipping stocks slumped, with Cosco Shipping tanking by the maximum cap of 10 per cent in Shanghai. But Kweichow Moutai, the world’s most valuable liquor stock, surged by 6 per cent to a record 2320.85 yuan.
New listings surged. Microport Cardioflow Medtech surged 54.3 per cent to HK$18.82 in Hong Kong. Guangdong Sanhe Pile surged by 44 per cent to 9.19 yuan in Shenzhen.
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