HK stocks approach six-week high on Alibaba tailwind while Chinese coal producers slump

21-Oct-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

Hong Kong stocks reached the highest level in almost six weeks, aided by a rally in Alibaba Group Holding, amid speculation on its ties with Chinese regulatory authorities. Coal producers fell after an overnight plunge in the commodity.

The Hang Seng Index gained for a fourth day, adding 1.4 per cent to 26,136.02 on Wednesday, the highest since September 10. The tech benchmark appreciated 2.7 per cent as the three biggest constituents advanced by at least 2.1 per cent.

Alibaba, the owner of this newspaper, surged 6.7 per cent to HK$175.80. Co-founder and former chair Jack Ma has travelled to Europe for a study tour on agriculture, according to a person familiar with his itinerary, marking his first overseas trip in more than a year. The stock has jumped almost 24 per cent this month, reversing a slide last quarter.

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Ma’s travel, about a year after China halted Ant Group’s stock offering, fanned speculation China’s regulatory authorities are softening a crackdown on the broader technology industry. Alibaba Health Information Technology surged 13.5 per cent to HK$12.62. Tencent gained 2.1 per cent to HK$509.50 while Meituan added 2.9 per cent to HK$293.80.

“In the short term, regulatory risks have subsided to some extent,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “Whether they will continue to gain depend on the upcoming earnings reports,” adding that investor sentiment has stabilised.

In China, the Shanghai Composite Index closed 0.2 per cent lower at 3,587. Major coal producers tumbled after futures on thermal coal prices plunged overnight. The government said late Tuesday that it was looking to intervene and stem surging prices following an energy supply crisis.

The most-traded thermal coal contract on the Zhengzhou Commodity Exchange, for delivery in January, fell 8 per cent to 1,755.40 yuan (US$275) a tonne, the biggest slide since August, Reuters reported. The price was still 260 per cent higher than a year earlier, having reached a record 1,982 yuan on Tuesday.

A gauge tracking coal producers by Wind Information slumped 7.3 per cent, with China Coal Energy and Shanxi Lanhua Sci-Tech Venture tumbling by the daily cap of 10 per cent.

Elsewhere, property stocks weakened after a government report showed China’s housing market shrank for the first time in six years as confidence sagged amid a debt crisis at China Evergrande and mounting concerns about debt defaults in the industry.

New home prices in the 70 major cities fell 0.08 per cent in September from August, the National Bureau of Sstatistics bureau said on Wednesday. Prices in the secondary market fell 0.2 per cent, Shanghai-based E-house China Research and Development Institute said. Country Garden slipped 0.6 per cent and Link REIT declined 0.4 per cent.

Markets in Asia-Pacific were mixed. Equity benchmarks in Japan and Australia advanced by 0.1 and 0.5 per cent respectively, while the Kospi in South Korea eased 0.5 per cent.


Category: Hong Kong

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