Hong Kong stocks hit two-week high as Tencent recovers from panic selling and investors switch to policy-friendly sectors
- Tencent rose from a one-week low after mainland media outlet deleted references to online gaming as ‘spiritual opium’ in republished article
- Anta Sports and car maker BYD enjoyed buying support as traders sheltered in sectors spared from China’s regulatory tightening
The Hang Seng Index gained 0.9 per cent to 26,426.56 at the close of Wednesday trading. Tencent, China’s biggest online gaming platform operator, rebounded more than 2 per cent after a mainland newspaper retracted a report that denounced the industry. China’s Shanghai Composite Index added 0.9 per cent.
Anta Sports Products rallied on a Chinese government’s plan to boost the size of the sports industry to 5 trillion yuan (US$773.9 billion) by 2025 while electric-car maker BYD jumped to a record close. Both sectors are seen as a shelter from the current regulatory storm.
Tencent recouped some of the 6.1 per cent slump on Tuesday after the media outlet owned by the state-run Xinhua News Agency retracted an article that labelled online gaming as “opium and drugs.” It republished the article after scrubbing those references.
“Given all that we had was an article that got later retracted, we see limited chance of a follow-up in government actions to regulate the industry further,” analysts at Morningstar wrote in a note to clients.
Tencent climbed 2.4 per cent from a one-week low to HK$456.80, after sliding 6.1 per cent on Tuesday. Meituan added 0.9 per cent to HK$213.60.