Hong Kong stocks rise for second day, trimming weekly loss with AIA, SMIC, BYD posting gains on valuation appeal

Hong Kong stocks rise for second day, trimming weekly loss with AIA, SMIC, BYD posting gains on valuation appeal

19 Jan Hong Kong stocks rise for second day, trimming weekly loss with AIA, SMIC, BYD posting gains on valuation appeal

Posted at 02:32h in Asia by

Stocks in Hong Kong rebounded for a second day as traders deemed the market’s slump this week to the lowest level in 14 months as excessive. Some valuation measures reached near all-time lows.

The Hang Seng Index climbed 0.6 per cent to 15,483.85 as of 10.46am local time, adding to a 0.8 per cent gain on Thursday. The Tech Index rose 0.3 per cent and the Shanghai Composite Index slipped 0.3 per cent.

China’s top chip maker SMIC rallied 2.8 per cent to HK$16.28 and insurer AIA Group jumped almost 4 per cent to HK$61.55. Online game operator NetEase added 3.2 per cent to HK$141.40 and Baidu gained 1.1 per cent to HK$100.70. Top EV maker BYD added 0.3 per cent to HK$196.90.

“The market is largely dominated by sentiment these days,” said Song Yiwei, an analyst at Bohai Securities. “The market will need a longer period of time to find its bottom.”

The Hang Seng Index fell to its lowest since October 2022 this week, driving its 14-day relative strength indicator below the threshold that typically signals the market is oversold and poised for a reversal. The average price to book value of the 82 members in the benchmark fell to 0.85 times, near the record 0.82 times seen in October 2022, according to Bloomberg data.

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The city’s stock market remains in deficit of more than 5 per cent this week, piling on the weekly losses since the start of the year. “Chronic disappointment” over China’s stimulus and policy easing measures have kept foreign investors at bay, with many cutting their allocation to lowest net underweight in more than a year.

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China’s central bank this week kept its key lending rates unchanged for a fifth month, while government reports showed growth trailed forecasts last quarter and home prices fell again in December by the most since 2015.

Foreign investors have sold 4.8 billion yuan (US$667 million) of Chinese stocks so far via the Stock Connect links on Friday, poised for a sixth straight day of net outflows, according to the data compiled by Eastmoney.com.

One stock started trading on Friday. Shandong Tengda Fasten Tech, which makes stainless steel fastener products, jumped 58 per cent to 26.85 yuan in Shenzhen.

Other major Asian markets all rose. Japan’s Nikkei 225 advanced 1.6 per cent, while South Korea’s Kospi gained 1 per cent and Australia’s S&P/ASX 200 added 1 per cent.

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