Hong Kong stocks lifted by tech sector ahead of JD.com results, as investors focus on earnings after China stimulus disappointment

Hong Kong stocks rose, led by the tech sector which was lifted by e-commerce giant JD.com's sharp gains ahead of its results announcement, as the focus shifts to corporate earnings in China where foreign fund outflows have showed signs of slowing.

The Hang Seng Index jumped 1.4 per cent to earning as of 2.55pm local time, rebounding from Thursday's 2.6 per cent fall. The Tech Index gained 2.3 per cent while the Shanghai Composite Index lost 0.2 per cent.

JD.com jumped 7.1 per cent to HK$88.60, ahead of its earnings release later today and the consensus is that it probably registered a 51 per cent profit rise last quarter to US$643 million. Rival Alibaba added 2.9 per cent to HK$71.70, Tencent gained 2 per cent to HK$273.60 while Meituan added 2.7 per cent to HK$88.65. HSBC added 1.2 per cent to HK$60.80 and China Merchants Bank strengthened 1.7 per cent to HK$29.95, leading gains in the banking sector.

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"Sentiment is slowly improving as earnings surprises are now in contrast to 2023 rewarded generously," Herald van der Linde, head of Asian equity strategy at HSBC, said in a note. China's earnings season is key, possibly more so than the "two sessions" political meetings which often focus on the big picture and lack details that stock analysts look for, he added.

Despite today's gains, the Hang Seng Index is still down 1 per cent this week after surging 6.6 per cent in February. Lack of reforms and no clear strategies during the top legislative meeting to restore the trend growth of the economy have piled pressure on local stocks, according to Redmond Wong, chief China strategist at Saxo Markets.

But sentiment around the world's second largest economy remains cautious as investors were disappointed by the lack of any major stimulus announcement at China's annual parliamentary meeting which ends next week.

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 more details on the government's plan to boost the economy.

Other key Asian markets were mixed. South Korea's Kospi Index lost 0.3 per cent while Australia's S&P/ASX 200 added 0.1 per cent. Japan's Nikkie 225 was little changed.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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