Hong Kong stocks halt slump as mainland funds lift market from 14-month low

The Hang Seng Index added 1.5 per cent to 16,339.83 at the local noon trading break. The Tech Index rallied 1.8 per cent while the Shanghai Composite Index was little changed near the lowest level since May 2020.

WuXi Biologics surged 8 per cent to HK$30.25 and Meituan rallied 3.8 per cent to HK$74.50. Tencent gained 2.6 per cent to HK$287.40 and Alibaba Group advanced 2.7 per cent to HK$71.20. China’s top EV maker BYD added 3.4 per cent to HK$211.60 while peer Xpeng climbed 2.3 per cent to HK$49.55.

Before today, the Hang Seng Index had declined more than 5 per cent following losses in every trading day in the new year. The slump sent the 14-day relative strength indicator closer toward an oversold territory this week, attracting buyers.

“China’s economic recovery, although bumpy, could lead to an improvement in corporate earnings and market sentiment in 2024,” Rickie Jia, a portfolio manager at Pictet in Hong Kong, said in a media briefing on Wednesday. “This, coupled with inexpensive valuations and light positioning among investors, means we remain tactically positive on Chinese equities.”

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Mainland funds bought HK$2.6 billion worth of Hong Kong-listed shares on Wednesday, taking their net purchases this year to HK$11.5 billion, according to Stock Connect data. Separately, offshore investors spent US$99 million to pick up A shares over the past two days.

US equities gained overnight, while the Japanese stock benchmark approached the highest level in three decades. The Nikkei 225 rallied 1.8 per cent, while South Korea’s Kospi added 0.1 per cent and Australia’s S&P/ASX 200 gained 0.5 per cent.

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Hongkongers hunt for roast chicken, soap and more bargains at US warehouse store in mainland China

Hongkongers hunt for roast chicken, soap and more bargains at US warehouse store in mainland China

Gains may be curtailed as China releases more data on Friday. Consumer prices probably fell 0.4 per cent in December, following a 0.5 per cent drop in November, according to economists tracked by Bloomberg. Exports are expected to grow 1.5 per cent versus a 0.5 per cent rise in November.

“I suspect deflation will persist,” said Benjamin Bennett, head of investment strategy and research at LGIM in Hong Kong. “Investors will worry that domestic demand in China is weakening further. That would be bad news for corporate earnings and the equity market.”

Three stocks debuted on Thursday. Suzhou West Deane New Power jumped 44 per cent to 41.78 yuan in Shanghai. Hefei Snowky Electric surged 105 per cent to 31.63 yuan in Shenzhen, and Beijing Yunxingyu Traffic Tech soared 129 per cent to 10.58 yuan.