China stocks advanced on Tuesday, boosted by improved sentiment in tech and car-related sectors, while the Hong Kong market ended a short trading session lower ahead of the Christmas holiday.
The Shanghai Composite Index rose 0.7 per cent to 2,982.68, capping its first gain in five sessions. The more tech-heavy Shenzhen Component Index climbed 1.3 per cent, and the ChiNext Index of start-ups listed in Shenzhen added 1.9 per cent.
In Hong Kong, the Hang Seng Index fell 0.2 per cent to 27,864.21, ending below the psychologically important 28,000-point support level. The market will resume trading on Friday.
“Technology shares have posted big gains this year, including sectors such as 5G and consumer electronics,” Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management, wrote in a note. “Gains in electric-vehicle stocks today ignited the overall market mood.”
Technology stocks including electric car-related stocks led the advance in China, driven by an overnight rally in US carmaker Tesla’s shares on Nasdaq.
Tesla shares, which reached a fresh intraday high of US$419.22 on Monday, have skyrocketed 74 per cent since the beginning of October. This has been driven by the company’s faster-than-expected production progress in its October earnings report, as well as a successful attempt to pull itself out of a chaotic period of litigation, government inquiries and lay-offs earlier this year.
Chinese suppliers to Tesla as well as lithium battery makers surged. China’s leading lithium battery maker Contemporary Amperex Technology soared 7.1 per cent to close at an all-time high of 99.5 yuan. It is now the most valuable stock on the ChiNext board of start-ups in Shenzhen, with a market cap of 220 billion yuan (US$31 billion).
A gauge of 227 electric vehicle-related stocks listed in Shanghai and Shenzhen jumped 3.3 per cent.
Semiconductor companies also surged broadly, led by chip maker SG Micro, which soared by the daily 10 per cent limit to 283.2 yuan after buying fast-growing rival ETA Solutions recently. The acquisition will help SG Micro expand its market share and strengthen its core products, analysts at Tianfeng Securities wrote in a report published on Monday. They also raised their earnings forecast for the company.
A gauge tracking 117 related companies surged 3.6 per cent, with seven stocks soaring by the daily 10 per cent limit.
In Hong Kong, casino operators bucked the downward trend, driven by optimism over their holiday incomes. SJM Holdings led the advance with a 1.3 per cent rise to HK$8.81.
Meanwhile, mainland Chinese banks weakened broadly. China Construction Bank was the biggest drag on the benchmark as it fell 0.9 per cent to HK$6.62.