Hong Kong stocks rally subsides ahead of Alibaba report as traders focus on profits, buybacks and state aid to boost momentum

The Hang Seng Index was little changed at 16,124.92 at the midday trading break, after surging as much as 1.7% to its highest since January 11. The high-tech index rose 2.2%, and the Shanghai Composite Index rose 0.9%.

Alibaba Group fell 1.4% to HK$74.95, reversing an earlier 1.4% rise on Wednesday after the operator of e-commerce platform Taobao said it would report better-than-expected quarterly profits. WuXi Biologics rose 7.3% to HK$19.48, while its affiliate WuXi AppTec rose 6.7% to HK$52.30 as it rushed to buy back following recent declines.

Elsewhere, Sunny Optical rose 4.5% to HK$50.65, and EV maker BYD rose 2.4% to HK$185.20.

Net profit at Alibaba Group, the paper’s owner, probably rose 20% from the previous three months to 48 billion yuan ($6.7 billion) in the quarter ending Dec. 31, according to analysts tracked by Bloomberg. It is said that it has become closer. Other profits reported by fast-food chain operator Yum China and semiconductor maker SMIC on Tuesday beat consensus estimates, according to Bloomberg data.

Corporate action has kept markets upbeat over the past week, when China’s state funds and market regulators stepped in to stem the collapse in confidence. Listed stocks in Shanghai, Shenzhen and Hong Kong have lost more than $5 trillion since 2021 as China’s post-coronavirus economic recovery ran out of gas.

The Hang Seng index’s recovery of about 4% this week follows traders’ bets on Chinese state-funded funds to reverse a three-year slump, amid speculation that the losses could be blamed on the country’s top leader and Regulatory authorities are being urged to reconsider their response. .

The Hong Kong stock market will be in turmoil in the Year of the Dragon: CLSA

Still, Brock Silvers, managing director at Kaiyuan Capital in Hong Kong, said such tactics could exacerbate market concerns. He warned that the current mini-rally, counting on an artificially high floor for stocks, could ultimately be seen as a lucrative exit.

“While the authorities are clearly troubled by the continued decline in the market, market intervention is unlikely to provide long-term relief,” he added. “Neither restrictions on short selling or derivatives nor sending a ‘varsity team’ will do anything to change the underlying drivers of negative sentiment.”

03:05

In China, the Lunar New Year rush is progressing, and travel to major cities both overseas and domestically is increasing.

In China, the Lunar New Year rush is progressing, and travel to major cities both overseas and domestically is increasing.

Chinese hot pot restaurant chain Hai Di Lao rose 1.1% to HK$13.30 on optimism that the week-long Lunar New Year would boost revenue, riding on Yum China’s 14% rise to HK$331.60. Ta.

Financial markets in mainland China will be closed from February 9th to 16th for the Lunar New Year. In Hong Kong, trading will be shortened to half a day on February 9 and closed for festivals on February 12 and 13.

One stock debuted on Wednesday. Integrated circuit maker Chengdu Microelectronic Technology soared 33 percent to 20.86 yuan in Shanghai.

Other major Asian markets were mixed. Japan’s Nikkei Stock Average fell 0.2%, while South Korea’s Kospi Index rose 1.7% and Australia’s S&P/ASX200 Index rose 0.7%.