Hong Kong stocks flirt with 4-year high on Tencent earnings beat
‘Hong Kong stocks still have upside room,’ analyst says, adding that expectations for corporate earnings are stable
The Hang Seng Index dropped 0.4 per cent to 25,519.32 at the close. The gauge rose by as much as 0.6 per cent in morning trading, briefly hitting its highest level since November 16, 2021.
The Hang Seng Tech Index slid 1 per cent. On the mainland, the CSI 300 Index slipped 0.1 per cent and the Shanghai Composite Index sank 0.5 per cent.
Power Assets Holdings shed 2.7 per cent to HK$51.45 and CK Infrastructure Holdings dropped 1.5 per cent to HK$54.30 after both companies posted sluggish profit growth in the first half. Alibaba Group Holding retreated 1.5 per cent to HK$121.80 and peer JD.com declined 1.8 per cent to HK$125.10 after a filing showed that the world’s biggest hedge fund, Bridgewater Associates, liquidated its holdings of Chinese companies in the second quarter.
Tempering losses, Tencent Holdings, the second-biggest weighting on the Hang Seng Index, gained 0.7 per cent to HK$590 after its quarterly profit topped estimates.
With the earnings season in full swing, corporate results are now in the driver’s seat after buzz around the tariff talks waned. Traders will be busy going through interim reports throughout August, when more of the biggest companies trading in the city, including Alibaba and Meituan, are due to report. A pickup in earnings performance will add fuel to the rally that has driven the Hang Seng Index up by almost 30 per cent this year.
“Hong Kong stocks still have upside room,” said Yan Zhaojun, an analyst at Zhongtai Securities. “Expectations for corporate earnings are stable. Earnings for the upstream industries will be revised upwards because of China’s move to cut excessive capacity in the anti-involution campaign.”