Hong Kong stocks log second winning week on Alibaba, tech rally as China services report aids sentiment

Hong Kong stocks completed a second week of advance on the back of Big Tech rally as a private report showing China’s services industry expanded significantly last month buoyed risk appetite.

The Hang Seng Index climbed 0.9 per cent to 24,837.85 from a week ago as Alibaba Group Holding rallied for a third day from an all-time low. The benchmark closed with a 0.6 per cent on Friday. The Shanghai Composite Index added 0.7 per cent as the market reopened after a five-day trading break due to a holiday.

The Hang Seng Tech Index advanced 0.3 per cent, bringing the rally this week to 1.4 per cent. Alibaba rose after its American depositary shares rallied 8.3 per cent in overnight US trading amid efforts to improve US-China ties while some investors saw value after the tech benchmark lost almost half of its value since February.

An index tracking China’s services industry increased last month to 53.4 from 46.7 in August when activity slumped to the lowest level since the height of the Covid-19 pandemic, according to the Caixin/Markit PMI report published on Friday.

The Hang Seng Index has taken a beating in the past four months, with almost a US$1 trillion erosion in market capitalisation since May. Beijing’s clampdown on the private businesses was followed closely by fears of contagion from China Evergrande’s debt crisis that sent the tech index to its lowest point since inception.