Hong Kong stocks jump on Alibaba’s best rally in a month as SoftBank rejects reports on stake sale while Xpeng gains on Stock Connect entry
- Hang Seng Index halts a two-day slide on Alibaba’s rally as SoftBank rejects reports it was planning to sell stake in a statement to Reuters
- WuXi Biologics recovers upon resumption of trading after suffering a record slump on Tuesday
Hong Kong stocks rose, halting a two-day slide as Alibaba Group Holding surged after SoftBank Group rejected reports it was planning to cut its stake. Electric-car maker and Tesla challenger Xpeng jumped by record after its Stock Connect inclusion.
The Hang Seng Index advanced 2 per cent to 24,808.16 at the local noon trading break. The Tech Index strengthened 3.1 per cent, the most since Friday, while China’s Shanghai Composite Index gained 0.4 per cent.
Alibaba, the owner of this newspaper, jumped 6.1 per cent to HK$118, the most in a month. SoftBank Group, which owns about a quarter of the company, rejected reports it was selling its stake in the Chinese e-commerce group, according to news reports.
The stock had lost more than 7 per cent in value this week after the Hangzhou-based company filed on February 4 to register 1 billion new American depositary shares, prompting analysts to speculate about SoftBank’s potential sale.
Alibaba holds a big sway on the local market as the stock carries more than 7 per cent weight in the benchmark and tech index.
“SoftBank’s clarification eased some market concerns,” said Mark Po, analyst at China Galaxy International Securities. “As a whole, the rebound might only be slight now but we may see some policy direction changing” to bring more impact to the market, he added.
Xpeng surged 11.5 per cent to HK$157.40, the biggest gain on record. The Shenzhen stock exchange included the Guangzhou-based EV maker into its Stock Connect trading link, according to a statement, giving access to mainland Chinese investors to trade in its Hong Kong-listed shares from February 9.
Other tech bellwethers also rose. Meituan added 3.6 per cent, Tencent gained 2.2 per cent while NetEase and JD.com appreciated by at least 3.9 per cent. China reiterated its stance on the role of private capital in the economy.
Efforts to prevent the disorderly expansion of capital have seen initial results, and the order of market competition is improving, the state-run People’s Daily said in a commentary.
WuXi Biologics failed to sustain a rebound. It fell 0.9 per cent to HK$61.70 after rising as much as 9.2 per cent. The stock was halted on Tuesday after a sell-off triggered by the US decision to put the company and 32 others under its “red-flag” list.
Meanwhile, Hong Kong is expected to see its daily Covid-19 cases soaring to a record of 1,161 on Wednesday and its toughest social distancing measures set to take effect on Thursday.
On the mainland, Asiainfo Security Technologies jumped 20 per cent on its first day of trading.
Markets in the Asian Pacific region rose. The Nikkei 225 in Japan strengthened 1.2 per cent while Australian and Korean stocks rose at least 0.7 per cent.
Author: Cheryl Heng, SCMP