Hong Kong stocks advanced for a third straight day led by tech giant Alibaba Group which triggered sector gains with onshore fund-buying lending support. Gains were tempered by data that showed slowing momentum in service activity.
The Hang Seng Index gained 0.7 per cent to 17,898.91 as of 10.20am local time to the week’s high while the Tech Index added 1.1 per cent, pulling away from two-month lows struck on Tuesday. But the Shanghai Composite Index declined 0.4 per cent.
E-commerce group Alibaba rallied 1.6 per cent to HK$71.55, its best gain in two weeks, after the company said it rewarded shareholders with US$5.8 billion in share buy-backs last quarter. Food delivery platform Meituan jumped 1.4 per cent to HK$113.80 and search engine operator Baidu jumped 1.7 per cent to HK$85.30, while EV maker Li Auto rallied 3.5 per cent to HK$76.45.
The Hang Seng Index is clawing back ground after losing 2 per cent in June, helped by mainland investors who are focused on high-dividend yielding shares. Onshore funds bought HK$6 billion (US$770 million) of Hong Kong-listed stocks via the Stock Connect on Monday, the most in two weeks.
“Sentiment is stabilising following the consolidation” from a May peak, analysts at Huatai Securities said in a note on Wednesday. Still, the market is torn between those who feel the worst is over and those who expect conditions are about to get worse. However, southbound flows should lend support to the market, they added.
Enthusiasm was capped by a private report released on Wednesday that showed China’s services activity expanded at the slowest pace in eight months. The Caixin China services purchasing managers’ index (PMI) was 51.2 in June, slowing from 54 in May and falling short of consensus estimates.
Three stocks debuted on Wednesday. Two new listings in Hong Kong tumbled, with Zhonggan Communication Group declining 37 per cent to HK$0.77 and Xi’an Kingfar Property Services dropping 16 per cent to HK$6.32. In Shanghai, driving equipment maker Shanghai Ananda Drive Techniques surged 120 per cent to 49.33 per share on its first day of trading.
Other major Asian markets were broadly higher. Japan’s Nikkei 225 added 0.7 per cent, South Korea’s Kospi edged up 0.1 per cent and Australia’s S&P/ASX 200 gained 0.2 per cent.
