Alibaba Health, Meituan lead Hong Kong stocks higher for second day as traders pick up tech bargains

On Mar 29, 2022 26

Hong Kong stocks rose for a second day, as bargain-hunting for technology companies continued and a retreat in oil prices eased inflation pressure. Photo: AFP

Stocks gained as bargain-hunting for technology companies continued and a retreat in oil prices eased inflation pressure
The Shanghai Composite Index was little changed as the mainland’s biggest commercial city entered its second day of partial lockdown

Hong Kong stocks rose for a second day, as bargain-hunting for technology companies continued and sentiment improved after a retreat in oil prices ease inflationary pressure.

The Hang Seng Index gained 0.5 per cent to 21,783.56 at the noon break on Tuesday, extending a 1.3 per cent gain the previous day. The Hang Seng Tech Index added 0.9 per cent.

China’s Shanghai Composite Index lost 0.4 per cent, as the mainland’s biggest commercial city entered its second day of partial lockdown to contain the transmission of Covid-19.

Alibaba Health Information Technology and online food delivery giant Meituan led the gains in Hong Kong stocks, rising at least 5.6 per cent each. Electric-vehicle maker BYD climbed before its earnings release late on Tuesday.

Other major markets in Asia all rose, with Japan pacing the gains in the region, following an overnight rally in US equities. Crude oil futures tumbled 1.1 per cent in Asian trading after falling 7 per cent on Monday.

Prospects for the progress of Russia-Ukraine ceasefire talks boosted risk appetite. Ukraine said its “minimum” goal from talks with Russian negotiators starting on Tuesday in Turkey will be an improvement in the immediate humanitarian situation.

Hong Kong stocks have recovered about US$640 billion since the benchmark hit a six-year low on March 15, as pledges by top officials to shore up growth, and a flurry of buyback plans by technology companies have spurred buying. Even after the rally, the Hang Seng Index is still trading at a 12 per cent discount to the book value, according to Bloomberg data.

“The most panicking moment is over and there’s a low chance that stocks test a new low,” said CMB International in a note on Tuesday. “There’s still room for the rebound to run, given the low valuation.”

Separately, Goldman Sachs struck an optimistic note on Chinese equities in its latest report, predicting that shares will rise 22 per cent in the next year. Growth will probably pick up in the second quarter on more macro-policy easing and a relaxation of property market measures, according to the US bank.

Alibaba Health jumped 7.4 per cent to HK$5.07 and Meituan rallied 5.6 per cent to HK$159.10, rising for a second day after its earnings result beat estimates. Alibaba Group Holding, owner of this newspaper, added 1.6 per cent to HK$112.90 and Tencent Holdings advanced 2.2 per cent to HK$374.40.

BYD added 0.8 per cent to HK$213. Its full-year earnings probably rose 3.5 per cent from a year earlier, according to the estimate of analysts compiled by Bloomberg.

Author: Zhang Shidong, SCMP