Hong Kong stocks advance as Chinese tech companies seen gaining buying support from some funds

  • Hang Seng Index climbs 0.4 per cent as tech companies jump amid signs some big funds including Ark ETFs and BlackRock are picking up values
  • Fed chairman Powell says US central bank is in no hurry to raise borrowing costs to protect economic recovery

Hong Kong stocks advanced, extending a weekly gain, amid signs some investors are buying tech stocks again and traders looked for stronger corporate earnings to support risk appetite. The Federal Reserve said the US central bank is not in a hurry to raise interest rates.

The Hang Seng Index climbed 0.4 per cent to 25,495.91 at the local noon break while the Shanghai Composite Index also added 0.3 per cent. The Hang Seng Tech Index jumped 0.8 per cent as funds including Cathie Wood’s Ark ETF vehicles and BlackRock appeared to have added Chinese tech stocks in recent weeks.

Sunny Optical and AAC Technologies climbed more than 2 per cent while Kuaishou Technology and Ping An Healthcare surged more than 5 per cent. Alibaba Group Holding, the owner of this newspaper, rose 1.3 per cent to HK$157.90.

Some 51 members of the Hang Seng benchmark gauge have published their earnings so far in the current reporting season, according to Bloomberg data, beating analysts’ projections by an average 2.8 per cent.

“The risk to stock valuations and prices has subsided to some extent,” said Wang Yitang, an analyst at Huaxi Securities. “But Hong Kong stocks are still seeking the bottom and the broader sentiment has yet to fully recover.”

Meituan rose 0.4 per cent to HK$225.80. The delivery service platform operator is expected to report a 4.04 billion yuan (US$624.8 million) net loss in its second quarter report later Monday, according to analysts tracked by Bloomberg.

BYD, the Chinese carmaker backed by Warren Buffett’s Berkshire Hathaway, fell 1.1 per cent to HK$259.40 after reporting a 30 per cent decline in first-half net income amid chip shortages and rising lithium costs.

Fed chairman Jerome Powell said that while the central bank may start tapering its bond purchases this year, it is in no rush to raise borrowing costs to help ensure the economy overcomes the pandemic. He did not outline a specific timetable for the policy normalisation.

Guomai Cultural & Media, a book publisher, surged 442 per cent from its initial public offering price to 43.98 yuan on its first day of trading in Shenzhen.

Author: Zhang Shidong, SCMP

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