Tencent, HSBC fuel Hong Kong stock advance as China vows to open markets while Tingyi slumps on earnings shock

Hong Kong stocks rose after China's top leadership vowed to keep opening the economy to foreign investors amid headwinds, reassuring global funds that have ploughed more than US$25 billion into the local equity market this year.

The Hang Seng Index gained 0.7 per cent to 19,707.45 at the local noon trading break. The Tech Index climbed 0.5 per cent while the Shanghai Composite Index slid 0.2 per cent.

Tencent surged 4.1 per cent to HK$377.60, while HSBC rallied 1.5 per cent to HK$52.45. JD.com added 1.1 per cent to HK$154.90, Baidu rose 0.7 per cent to HK$150.60 and Chow Tai Fook Jewellery Group advanced 2.1 per cent to HK$15.56.

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Limiting gains, noodle maker Tingyi slumped 11.3 per cent to HK$12.58 after earnings in 2022 slumped 31 per cent, as its first report card since joining the benchmark index in December underscored worries about consumption recovery.

"The recovery in China is on a strong footing," Jing Ning, head of equities at Fidelity International, said at a webinar on market outlook on Tuesday, citing a stabilising housing market and investment data, among other factors. "Valuation is attractive."

Premier Li Qiang said China's economy will stay open "no matter what happens" in a message to global CEOs including Apple's Tim Cook and Bridgewater Associates' Ray Dalio at a forum in Beijing this week. "No matter how the international situation changes, China will unswervingly keep expanding our opening up," Li said.

Foreign investors bought US$2.1 billion worth of yuan-denominated stocks in the five days to March 22, the biggest weekly inflow since end-January, according to data compiled by Morgan Stanley. The net purchases took the tally this year to US$25.2 billion.

Mainland funds have remained cautious about the strength of China's post-Covid consumption recovery. Bullish forecasts by China analysts at Wall Street banks have gone unheeded as a housing-market rebound remains subdued and the US banking crisis weighed on sentiment, Goldman Sachs said after meeting clients in China.

Elsewhere, BYD added 0.3 per cent to HK$208.60, Nongfu Spring advanced 0.9 per cent to HK$45.90, China Southern Airlines jumped 1.3 per cent to HK$5.49, while WH Group slid 0.2 per cent to HK$4.47. The companies are set to publish their latest earnings reports today.

Two stocks started trading for the first time. Equipment maker Zhuhai Kles Technology surged 38 per cent to 88.20 yuan in Shenzhen. Fast-food operator DPC Dash was unchanged at HK$46 in Hong Kong.

Key Asian markets advanced. The Nikkei 225 in Japan added 0.1 per cent and the S&P ASX 200 Index in Australia rose 0.9 per cent, while the Kospi in South Korea gained 0.5 per cent.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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