Saturday, March 2, 2024

Hong Kong stocks recover as Tencent and NetEase recoup some of US$63 billion loss; new China reports support sentiment

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Hong Kong stock Revenues rose as video game companies recovered after the Chinese government calmed fears of a tightening crackdown on the industry, with game approvals posting their biggest jump in 17 months. A better-than-expected rise in China’s industrial profits also supported sentiment.

The Hang Seng Index rose 1.7% to 16,624.84 at the local noon trading break, while the tech index rose 2.6%. Both indexes have regained some of their losses from last week. The city’s financial markets were closed on Monday and Tuesday for Christmas. The Shanghai Composite Index rose 0.5%.

Following Beijing, Tencent soared 4% to HK$285, while NetEase jumped 11.9% to HK$136.50. Approved 105 new game titlesis the highest since July 2022, and said plans to curb spending have not yet been finalized.I owned both stocks. depressed Proposals to curb excessive gaming spending led to a $63 billion plunge on Friday.

Elsewhere, Alibaba Group rose 2.7% to HK$73.80, and Meituan rose 2.2% to HK$78.30. EV maker BYD rose 1.3% to HK$205.20, while Li Auto rose 6.8% to HK$136.90.

“We believe the market’s concerns about an industry crackdown are overdone,” Jefferies analysts said in a note over the weekend. He added that the draft regulations are aimed at fostering a healthy gaming sector and the market needs to monitor the outcome.

Meanwhile, profits of China’s industrial enterprises rose 29.5% year-on-year in November, accelerating from a 2.7% pace in October, the Bureau of Statistics said on Wednesday.

01:48

“It’s warm inside the refrigerator”: Below freezing Beijing, breaking record for coldest December

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The Hang Seng Index fell 2.5% in December, marking the fifth consecutive month of declines and the longest losing streak since 2018. The benchmark has fallen 17.4% this year and is on track for an unprecedented four-year decline.

Latecomers to the index, Lee Auto, Lenovo and Xiaomi, were the year’s biggest winners, rising 49% to 78%. Li-Ning, Meituan and Country Garden Services had the worst performance, dropping 56-71%. In the land market, the CSI300 has fallen nearly 14% this year. Advanced Micro-fabrication and Naura Technology topped the list with his gains of 5.1% to 6.2%.

Elsewhere, Zhejiang Long Technology soared 79% to 30.08 yuan on its first day of trading in Shanghai.

Asian markets rose. Japan’s Nikkei Stock Average rose 1.1%, Australia’s S&P/ASX 200 index rose 0.8% and South Korea’s Kospi index rose 0.4%.



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