Hong Kong-listed stocks experienced a noteworthy resurgence on Tuesday, with the Hang Seng index registering its biggest one-day gain (2.6%) in the past two months. Interestingly, it was Beijing’s intervention that led the rally, with investors cheering the government’s acknowledgment of an urgent need to revive the stock markets. Also, news of significant insider buying in shares of e-commerce giant Alibaba (HK:9988) boosted investor sentiment. The momentum continued today, with the Hang Seng Index up more than 2% as of writing. This indicates that Beijing’s stimulus measures might support the positive movement in Hong Kong stocks.
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More on Tuesday’s Rally in Hong Kong Stocks
Shares of Alibaba, Tencent (HK:0700), JD.com (HK:9618), NetEase (HK:9999), Baidu (HK:9888), and BYD (HK:1211) rallied to record highs on Tuesday.
At a policy meeting yesterday, Premier Li Qiang called for more “forceful” steps to support Chinese stocks, boost investor confidence, and improve the quality of listed companies. Reports suggest that policymakers are strategizing to mobilize roughly 2 trillion yuan ($280 billion) from offshore accounts of state-owned corporations into the equity markets.
Moreover, Alibaba announced yesterday that co-founder Jack Ma and chairman Joseph Tsai bought roughly $200 million of BABA shares recently. This fueled investor confidence in the stock since corporate insiders are known to have the best knowledge about a company’s future potential. Alibaba shares rose over 7% yesterday and are continuing upwards with a 5.3% jump seen today.
Another factor that may have also caused the Chinese gaming stocks to jump yesterday was that China’s regulator removed new stricter rules on video game operators from its website. This could mean that either China’s National Press and Publication Administration (NPPA) will completely do away with the proposed rules or could announce more relaxed rules. Tencent’s Hong Kong-listed shares gained 3.7%, while rival NetEase stock rose over 8% on January 23.
What are the Best Hong Kong-listed Chinese Stocks?
Stock indices in Hong Kong and China have erased over $1 trillion in market capitalization so far this year. Concerns about China’s sluggish economic revival, stringent norms on the tech sector, and the country’s beleaguered property sector, its largest contributor, have choked investor confidence. Also, escalating U.S.-China tensions are weighing on investors’ confidence. Foreign funds have withdrawn billions of dollars in investment from the mainland and parked their funds in other promising nations like India.
Let’s take a look at how some of the major Hong Kong-listed Chinese stocks perform on the TipRanks Stock Comparison Tool.
