Hong Kong stocks trade close to four-week high as NetEase jumps on new game approvals, EV makers BYD, Li Auto rise

The Hang Seng Index gained 0.5 per cent to 16,814.63 as of 10.39am local time. The Hang Seng Tech Index climbed 0.4 per cent, and the Shanghai Composite Index retreated 0.4 per cent.

NetEase advanced 2 per cent to HK$154.30 after the National Press and Publication Administration gave the green light to 14 imported games in April. Chinese electric-vehicle (EV) maker BYD advanced 2.1 per cent to HK$206 and rival Li Auto added 2.2 per cent to HK$93.25. Xiaomi, the smartphone maker that has recently made its foray into the EV business, climbed 2.1 per cent to HK$15.84.

Sentiment on Hong Kong stocks has been on a slow recovery after the visit by US Treasury Secretary Janet Yellen eased geopolitical tensions and official data pointed towards strong consumer spending during the Ching Ming Festival. A purchasing manages’ index report also indicated that China’s manufacturing expanded at the fastest pace in a year last month.

“Investors are still cautious, waiting for a more meaningful and sustainable recovery to come through,” said Elizabeth Kwik, investment director of Asian equities at abrdn. “Valuations remain at a historic trough, which means many high-quality companies with strong brand names are trading cheap. This bodes well for the stock market, as effects from policy support are gradually starting to materialise. Over time, this should help reverse the trend of downward revision of companies’ earnings.”

The Hang Seng Index is valued at 5.9 times realised earnings, the cheapest among major markets globally, according to Bloomberg data.

Traders will be on the lookout for a slew of key March economic data from China and the US due later this week, including inflation and foreign trade. China’s consumer prices probably increased by 0.4 per cent, returning to growth for a second month, while exports may have fallen by 2 per cent, Bloomberg data shows. Inflation in the US probably accelerated to 3.4 per cent from 3.2 per cent in February.

Elsewhere, China Tourism Group Duty Free, the nation’s largest operator of duty-free shops, added 2.1 per cent to HK$76.10 after its preliminary earnings report showed improved margins in the first quarter.

Other major Asian markets all rose. Japan’s Nikkei 225 climbed 0.5 per cent, and Australia’s S&P/ASX 200 added 0.4 per cent while South Korea’s Kospi slipped 0.2 per cent.