Hong Kong stocks rebound as Tencent, NetEase rally, China data aids sentiment

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Hong Kong stocks gained as video-gaming companies rebounded after Beijing calmed jitters about tightening industry policing and approved new titles by the most in 17 months. China’s better-than-expected industrial profits also aided sentiment.

The Hang Seng Index climbed 1.3 per cent to 16,546.75 at 11.10am local time, and the Tech Index advanced 1.8 per cent, both clawing back some of the sell-off on Friday. The city’s financial markets were closed on Monday and Tuesday for Christmas. The Shanghai Composite Index fell 0.1 per cent to the lowest since October 2022.

Tencent surged 5.3 per cent to HK$288.60 and NetEase soared 10.6 per cent to HK$134.90, after Beijing approved 105 new game titles this month, the most since July 2022. Both stocks plunged in a US$63 billion sell-off on Friday, sparked by the government’s proposed curbs on excessive spending on video games.

Elsewhere, Alibaba Group rose 2.4 per cent to HK$73.55 and Meituan gained 1.4 per cent to HK$77.70. EV maker BYD added 1.5 per cent to HK$205.60 while Li Auto strengthened 4.8 per cent to HK$134.40.

“We believe market concerns over a sector crackdown are overdone,” analysts at Jefferies said in a note over the weekened. The draft rules are aimed at fostering a healthy gaming sector and the market needs to monitor the outcome, they added.

The Hang Seng Index has declined 4 per cent in December, the fifth straight monthly setback and longest losing streak since 2018. The benchmark has lost 17.4 per cent this year, set for an unprecedented four-year slump.

Meanwhile, profits for China’s industrial companies rose 29.5 per cent from a year earlier in November, accelerating from a 2.7 per cent pace in October, the statistics bureau said on Wednesday.

Zhejiang Dragon Technology surged 96 per cent to 32.99 yuan on its first day of trading in Shanghai.

Asian markets were mixed. Japan’s Nikkei 225 rose 1.1 per cent while the S&P/ASX 200 Index gained 1 per cent in Australia, and South Korea’s Kospi Index declined 0.1 per cent.

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