Hong Kong stocks climb to one-month high while tech rally bypasses Alibaba amid cuts in price targets
- Stock rally bypasses Alibaba amid concerns about its media interests as CEO Zhang steps down from Weibo’s board
- Gains in Chinese tech stocks have added US$133 billion in market value since a late Thursday rebound
Hong Kong stocks advanced, reversing an earlier drop, as gains in Tencent Holdings and Chinese tech peers lifted the market to near a one-month high. The rally bypassed Alibaba Group Holding as analysts trimmed their price targets.
The Hang Seng Index rose 0.4 per cent to 23,833.57 at the local midday trading break, the highest level since December 13. The index earlier dropped as much as 0.6 per cent. The Tech Index advanced 0.5 per cent, while China’s Shanghai Composite Index declined by less than 0.1 per cent.
Tencent climbed 1.6 per cent to HK$460.60 while Meituan appreciated 1.9 per cent and JD.com rose 2.7 per cent. Chinese tech stocks have gained more than 5 per cent since a late Thursday rebound, adding at least US$133 billion in value along the way.
“It is still early to tell if this round of gains are here to stay as the recovery remains concentrated in weaker stocks,” said Stanley Chik, research director at BrightSmart Securities, said in a note on Tuesday. “Continued Covid-19 outbreaks in Hong Kong and mainland China also add to economic pressures.”
Hong Kong is battling an Covid-19 outbreak of late involving the more transmissive variant, with 24 cases confirmed Monday, five of them local.
The tech rally bypassed Alibaba, the owner of this newspaper, whose shares slipped 1.2 per cent to HK$125.40. Chairman and group CEO Daniel Zhang resigned from the board of Weibo on Monday, according to an exchange filing, replaced by chief marketing officer Pen Hung Tung.
Alibaba has sold some of its media interests in recent months, including the Mango TV network. Besides, analysts at Citigroup, Nomura, Daiwa Capital, Benchmark and Atlantic Equities have trimmed their price targets for Alibaba’s Hong Kong and US-listed shares over the past month, according to Bloomberg data.
Weibo slid 1.4 per cent to HK$261.60, taking the setback to about 5 per cent since the Chinese Twitter-like social-media service went public on December 8.
Major markets in Asia-Pacific retreated on Tuesday. Japanese fell 0.8 per cent while equities in Australia lost 0.2 per cent.
Author: Cheryl Heng, SCMP