Hong Kong Stock Market Advances as Alibaba and Tencent Propel Tech Index Higher

China Stock Market Boosts Hong Kong Stocks

Hong Kong stocks advanced, overcoming a jittery start to trading as investors bought back Chinese tech leaders including Alibaba Group and Tencent Holdings. The market was headed for a third week of rally, driven by bets on further stimulus injection from Beijing to revive growth.

The Hang Seng Index added 0.9 per cent to 22,303.15 at 10.15am local time, after losing as much as 1.3 per cent in opening trades. The Tech Index climbed 1.4 per cent. Markets in mainland China are closed through October 7 for a holiday.

Alibaba Group Holding gained 1.5 per cent to HK$111.70 while e-commerce peer JD.com appreciated 4.9 per cent to HK$178.70. WeChat owner Tencent jumped 1.8 per cent to HK$474.40. Property developer Longfor Group jumped 2.2 per cent to HK$17.36 and China Resources Land added 1 per cent.

Investors Eye Long-Term Growth

“Many investors wanted to see the effects of the policies to justify a long-term market turnaround,” John Choi, analyst at Daiwa Securities, wrote in a note to clients. This round of rally has more legs as many stocks are still trading below their three- and five-year averages, he said, adding that e-commerce verticals will be among the key beneficiaries of further fiscal stimulus measures.

The Hang Seng Index has risen 7 per cent this week, on top of a 13 per cent surge last week that marked the biggest weekly rally in 26 years. The 22 per cent cumulative gain since China unleashed its policy bazooka on September 24 has since restored US$3 trillion of market capitalisation to markets in Hong Kong, Shanghai, and Shenzhen.

Most Asian markets traded higher on Friday. Australia’s S&P/ASX 200 Index gained 1.6 per cent, and South Korea’s Kospi jumped 0.7 per cent, while Japan’s Nikkei 225 Index was little changed.