Hong Kong stocks join regional recovery as Tencent, oil firms accelerate gains

Hong Kong stocks hovered near a two-week high as the region continues to recover from last week’s rout. Tencent rose on bets on a surprising financial result.

The Hang Seng Index was up 0.1% at 17,128.78 by midday, after losing 0.2% earlier in the day. The Tech Index shed 0.4%, while the Shanghai Composite Index was little changed.

Tencent rose 1% to HK$378.60, a one-month high, and its earnings card, due out on Wednesday, is likely to show a 54% profit jump in the latest quarter. CNOOC rose 2.6% to HK$20.25, PetroChina rose 2.5% to HK$6.84 and Sinopec gained 1% to HK$5.01 after oil prices rose on growing concerns about widening conflicts in the Middle East.

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Limiting gains, Li Auto fell 2 percent to HK$75.45 and BYD shed 1 percent to HK$211.40, leading a retreat among electric vehicle makers. Food delivery platform Meituan fell 1.5 percent to HK$102.40 and gaming firm NetEase fell 1.1 percent to HK$139.20.

The city’s benchmark index has risen for five straight trading days after falling to a three-month low amid a regional sell-off last week, on track for its best winning streak since May. But it remains to be seen whether the rebound will last as fundamentals have yet to turn, analysts said.

“Once the Hong Kong stock market posts some significant gains, volatility will pick up, which could lead to more profit-taking at that point,” analysts at Ping An Securities wrote in a note on Monday. Key to sustained inflows is the continued recovery of mainland China’s economic momentum, they added.

Declining trading volume on the city market also adds to the potential concern, indicating a possible lack of sustained investor interest or participation in current market conditions. Turnover on the city stock exchange fell to HK$70.3 billion (US$9 billion) on Monday, a six-month low.

Elsewhere, County Garden Services fell 6.2% to HK$4.40 after the company said its first-half net profit fell as much as 37% to 1.7 billion yuan ($237 million) in the first six months of the year amid China’s ongoing property crisis.

Major Asian markets rose, continuing to rebound from last week’s sell-off. Japan’s Nikkei 225 rose 2.6% and Australia’s S&P/ASX 200 index rose 0.1%. South Korea’s Kospi index was little changed.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative daily covering China and Asia for more than a century. For more SCMP articles, visit the SCMP app or the SCMP Facebook page and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.