Hong Kong stocks hover at 3-year high before Fed meeting, Tencent results
China’s stock rally may face correction given its similarities with the 2015 boom and bust cycle, according to a BofA survey
The Hang Seng Index rose 0.1 per cent to 24,771.14 at the close, hovering near a three-year high. The Hang Seng Tech Index dropped 1.1 per cent. On the mainland, the CSI 300 Index added 0.1 per cent and the Shanghai Composite Index slipped 0.1 per cent.
Technology stocks were mostly lower. Tencent, the third-largest weighting on the city’s stock benchmark at 8.1 per cent, slipped 0.2 per cent to HK$540.00. Alibaba Group Holding dropped 1.6 per cent to HK$141.10 and China Unicom sank 4.5 per cent to HK$9.16 after the mobile operator’s full-year earnings fell short of expectations.
On the positive side, China Resources Beer Holdings rallied 5.4 per cent to HK$30.05 after Daiwa Securities raised the 12-month price target for the brewer by 6 per cent, citing better prices and margins for its products than its peers. Gold producer Zijin Mining Group added 1.7 per cent to HK$18.06 after the bullion prices refreshed a record high for a third consecutive day.
The world-beating rally in Hong Kong comes up against full-year earnings of 38 companies on the Hang Seng Index in the next few days. Strong report cards will justify and instil more optimism in the rally that has significantly narrowed the valuation gap between Chinese and US technology stocks. The index has advanced 23 per cent in 2025.
The stellar run in Hong Kong stocks has prompted caution among investors, some of whom compared the current situation with the quick boom and bust cycle in 2015, according to a survey by BofA Securities.