AIA, BYD, Alibaba lead Hang Seng rebound as oil retreat eases inflation worries, Russia and Ukraine eye ceasefire

  • Hang Seng rebounds from a four-day rout as commodity prices ease, tempering concerns about global inflation and recession
  • Alibaba, Xinyi Solar and BYD lead rebound while EV maker NIO debuts at a price nearly equivalent to its US-listed stock

Hong Kong stocks jumped by the most in three weeks from near a six-year low as oil and other commodity prices cooled while Russia and Ukraine pursued ceasefire plan.

The Hang Seng Index gained 1.3 per cent to 20,888.30 at the noon break, set for the biggest gain since February 16. The Tech Index surged 1.6 per cent, while the Shanghai Composite Index added 1.9 per cent. Markets in Asia-Pacific rallied, as Japan’s Nikkei 225 advanced by almost 4 per cent.

All but 11 of the 66 Hang Seng Index members gained. AIA Group surged 4.2 per cent while Alibaba Group Holding climbed 0.2 per cent. BYD and Xinyi Solar added more than 5 per cent.

Crude oil tumbled 12 per cent overnight to near US$110 a barrel after the United Arab Emirates said that it will ask other OPEC members to overcome any shortage caused by Russia’s invasion of Ukraine while the US banned Russian oil imports. Gold also retreated from a 19-month high.

Meanwhile, a top foreign policy aide to Ukraine’s president said the country is open to discussing Russia’s demand for neutrality as long as it is given security guarantees.

“These developments saw traders breathe a sigh of relief, and investors proceeded to enthusiastically buy the dip,” said Michael McCarthy, chief strategy officer at Tiger Brokers Australia. “However, the elevated volatility may mean this is respite rather than resolution.”

Buyers returned after the local market had lost almost 9 per cent in a four-day slump through Wednesday, sending many Hang Seng Index members into deeply oversold territory based on a technical indicator. They traded at the widest discount to book value in at least a decade this week, according to Bloomberg data., Alibaba’s biggest domestic rival in e-commerce, gained 1.6 per cent before its fourth-quarter earnings later Thursday. Net income probably rose 7.3 per cent from a year earlier, according to consensus of analysts tracked by Bloomberg.

Electric-vehicle maker NIO traded at HK$161.80 on the first day of trading in Hong Kong, little changed from its equivalent US-traded stock price.

Jinmao Property Services, the Chinese real-estate management firm, slid 27 per cent in its debut in Hong Kong while Wecome Intelligent Manufacturing surged 44 per cent in Shanghai.

Zhejiang Huayou Cobalt rallied 8.3 per cent, snapping two days of losses. China’s state-run media said its business partner Tsinghshan Holding Group had collected enough inventories to close out its short nickel positions on the London Metal Exchange.

Author: Zhang Shidong, SCMP

You might also like