Chinese electric-car makers BYD, Xpeng skyrocket on January sales as Hong Kong stocks surge after Lunar New Year holiday

  • Shares soared as trading resumed on Friday, amid signs the global sell-off in tech stocks may be easing
  • A slowing Chinese economy bolstered hopes that further policy easing is round the corner

Hong Kong stocks soared as trading resumed after the Lunar New Year break, amid signs the global sell-off in tech stocks is easing.

Banks and carmakers added to the rally, while a slowing Chinese economy bolstered hopes that further policy easing is round the corner.

The Hang Seng Index gained 2.7 per cent to 24,447.31 at the noon trading break on Friday, the steepest gain in two weeks. The city’s Tech Index jumped 2.3 per cent. Markets in the mainland remain shut for the holidays until Monday.

Alibaba Group Holding, the owner of this newspaper, led Friday’s gains. Its shares jumped 4.8 per cent to HK$119.50, the most in two weeks. Food delivery platform Meituan added 2.6 per cent and Tencent rose 0.9 per cent. and NetEase gained at least 1.4 per cent.

Chinese tech stocks caught up with their US-listed peers, after the Nasdaq Golden Dragon China Index gained at least 5 per cent since Hong Kong markets last traded on Monday.

“In January, Hong Kong stocks proved to be resilient against declines and the outlook should not be pessimistic,” said Wang Xueheng, an analyst at Guosen Securities, in a strategy report published on Thursday.

The Hang Seng Index recouped at least US$42 billion of market value on Monday, after being bruised by a global sell-off stoked by the Federal Reserve’s hawkish stance in late January.

Stocks in Hong Kong have risen in the week following the Lunar New Year holidays in seven of the last 10 years, according to Bloomberg data. They climbed by 1 per cent on average.

Activity in the Chinese manufacturing and service sector slowed last month as the country battled a resurgence of Covid-19 outbreaks, according to official reports on Sunday. The economic slowdown fuelled hopes that more loosening of monetary policy is on the way, given Beijing’s key policy goal of stabilising growth this year.

Chinese electric vehicle (EV) makers shot up, after their January sales surged by more than 100 per cent from a year ago. BYD appreciated 6.3 per cent, its EV deliveries last month having jumped by a massive 362 per cent. Shares of Li Auto soared 12.4 per cent, while XPeng advanced 9.7 per cent.

Separately, HSBC rose 4.6 per cent to HK$57.70, its highest in almost two years, as the Bank of England hiked interest rates for the second time in three months, a move likely to bolster its lending profits. Standard Chartered added 4.9 per cent to trade at a 23-month high.

Major Asian markets rose on Friday. The Japanese index gained 0.3 per cent, while Korean stocks added 1.1 per cent. The Australian benchmark was little changed.

Author: Cheryl Heng, SCMP

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