Hong Kong stocks in firm start lifted by tech sector ahead of JD.com earnings, caution prevails over lack of China stimulus

Hong Kong stocks in firm start lifted by tech sector ahead of JD.com earnings, caution prevails over lack of China stimulus

06 Mar Hong Kong stocks in firm start lifted by tech sector ahead of JD.com earnings, caution prevails over lack of China stimulus

Posted at 02:53h in Asia by

Hong Kong stocks rose, led by the tech sector which was lifted by e-commerce giant JD.com’s sharp gains ahead of its earnings report, but sentiment was cautious as investors were disappointed by the lack of any major stimulus announcement at China’s annual parliamentary meeting.

The Hang Seng Index added 0.8 per cent to 16,284.96 as of 10.15am local time, after retreating 2.6 per cent on Tuesday. The Tech Index gained 1.5 per cent while the Shanghai Composite Index lost 0.3 per cent.

JD.com jumped 4.6 per cent to HK$86.55, before its earnings release later today and the consensus is it probably reported a 51 per cent profit jump last quarter to US$643 million. Rival Alibaba added 1.5 per cent to HK$70.75, Tencent gained 0.5 per cent to HK$269.60 while Baidu added 0.9 per cent to HK$96.15. HSBC added 0.5 per cent to HK$60.35 and China Merchants Bank strengthened 1 per cent to HK$29.80, leading gains in the banking sector.

Traders are now awaiting a key press conference this afternoon, where policymakers from National Development and Reform Commission, Ministry of Finance, People’s Bank of China and China Securities Regulatory Commission could provide details on the government’s plan to boost the economy.

Despite today’s gains, the Hang Seng Index still has retreated 1.5 per cent so far this month after surging 6.6 per cent in February. Lack of reform and clear strategies during the top legislative meeting to restore the trend growth of the economy have piled selling pressure on local stocks, according to Redmond Wong, chief China strategist at Saxo Markets.

“We flag the risk of a ‘policy-expectation’ mismatch, which, together with the likely tepid economic data for February, may trigger the stock market to pull back after the Two Sessions,” Pactric Pan, strategist at Daiwa Capital Markets, said in a note on Wednesday. More concrete measures are needed to address the economic challenges, he said.

Other key Asian markets also traded lower after the decline in the US markets. South Korea’s Kospi Index lost 0.6 per cent, Australia’s S&P/ASX 200 dropped 0.2 per cent, and Japan’s Nikkie 225 lost 0.3 per cent.

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