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Hong Kong stock market
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Hong Kong stocks slip from 9-month high before Alibaba, Tencent report earnings while ESR surges on take-private bid

  • Stocks retreated after a 28 per cent rally in the Hang Seng Index since late January added US$1 trillion in market capitalisation
  • ESR Group soared after receiving a non-binding offer to take the logistics asset manager private, but the offer price has not been disclosed

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Screens showing the Hang Seng Index and stock prices outside the Exchange Square in Central.Photo: Sun Yeung
Jiaxing Li
Hong Kong stocks traded near a nine-month high as signs of exhaustion emerged after a US$1 trillion rally over the past three months. Alibaba Group Holding and Tencent led Chinese technology companies higher before their quarterly earnings reports. ESR Group soared by the most on record after a privatisation bid.
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The Hang Seng Index retreated 0.2 per cent to 19,073.71 on Tuesday, after rising as much as 1 per cent earlier in the session. The Tech Index pared gain to 0.6 per cent, while the Shanghai Composite Index was little changed.

Macau casino operator Galaxy Entertainment dropped 3.9 per cent to HK$36.80 and peer Sands China weakened 2.2 per cent to HK$20.45 while EV maker Li Auto lost 2.4 per cent to HK$102.50. Hang Lung Properties declined 3.6 per cent to HK$7.98 and New World Development fell 2.5 per cent to HK$9.12, leading a retreat among Hong Kong developers.

Hang Seng Index climbed above 19,000 level on Monday for the first time since August 2023. Photo: Sam Tsang
Hang Seng Index climbed above 19,000 level on Monday for the first time since August 2023. Photo: Sam Tsang

Alibaba, the owner of this newspaper, rose 1.8 per cent to a seven-month high of HK$82.65. Its report card later today may show earnings fell by a slower pace last quarter. Tencent advanced 1 per cent to HK$381.80, a level not seen since April last year. Earnings at the WeChat owner probably rose more than 30 per cent, according to market consensus.

The market remained firmly in a technical bull run, having risen more than 28 per cent from this year’s low in late January. The rally has added US$1 trillion in capitalisation to the city’s bourse, according to Bloomberg data, as global funds found better value than other overpriced markets.

The rally may be running out of gas as valuations are no longer distressed, while stretched technical indicators for offshore equities suggest the market could be due for a reversal, according to JPMorgan Private Bank.

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“Without a meaningful policy shift to revive investor confidence, we suspect this tactical bounce is close to an end,” Alex Wolf, head of investment strategy at the US private bank, said in a note on Tuesday. Further gains would require a sustainable improvement in nominal growth and earnings, which remains to be seen, he added.

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