Thu. Jan 27th, 2022

Shares in China’s technology companies rose on the last day of trading this year after huge gains on Wall Street for US-listed Chinese companies, though the rally was not enough to shake off the gloom after a gloomy 2021 for the sector marked by ‘ a regulatory repression.

Hong Kong’s Hang Seng index rose 1.2 percent on Friday, while the stock market’s technology index climbed nearly 4 percent. China’s CSI 300 of Shanghai and Shenzhen-listed stocks rose 0.4 percent.

The rally followed a boost for the Nasdaq Golden Dragon index of large and medium-sized Chinese companies, which rose 9.4 percent on Thursday, its best one-day performance in more than a decade. The rise was driven by double-digit gains for companies including Internet group Tencent, search engine Baidu, video-sharing platform Bilibili and New Oriental Education.

The Golden Dragon index fell by 42 percent in 2021, as Xi Jinping’s campaign to keep the country’s technology leaders in check and the threat of forced delistings of U.S. capital markets have taken their toll.

Friday’s gains in Asia were also driven by some of China’s biggest technology companies, with e-commerce group Alibaba rising 8 percent in Hong Kong trade and its rival advancing about 5 percent. NetEase, the gaming company, jumped about 4 percent while food delivery group Meituan added 3.2 percent.

Dickie Wong, head of research at Kingston Securities, said the trials of the past year have already been priced in and that market sentiment is returning to the Chinese technology sector. “Internet and technology-related stocks are now trading at extremely low valuations,” he said. “It’s time for a rebound.”

The market enthusiasm came when China reported a slight surge in manufacturing activity for December despite a slowdown in the real estate sector, problems with energy supply and coronavirus outbreaks.

The official purchasing managers’ index rose to 50.3, from 50.1 in November, according to the National Bureau of Statistics, which defies analysts’ expectations of a reading below 50, which would indicate a contraction.

Friday’s setback was not enough to wipe out Hang Seng’s 2021 losses. The broader index is down 14 percent in 2021 and the Hang Seng Tech index has lost 48 percent since peaking in February.

The share price of Alibaba, which was fined a record $ 2.8 billion for antitrust violations in April, has nearly halved in Hong Kong year-to-date, while Meituan tumbled more than a fifth, dropped nearly a fifth and Tencent lost more than 17 percent.

Elsewhere, European stock markets were muted in morning trades as trading closed for the year. The local Stoxx 600 index opened flat, while the UK’s FTSE 100 fell 0.3 percent. Germany’s Xetra Dax is closed.

Yields on the benchmark 10-year U.S. Treasury note were flat at about 1.52 percent, with trading expected to be light by the day after the Securities Industry and Financial Markets Association recommended an early market close for the holiday.

Brent crude, the international oil benchmark, fell 0.1 percent lower to $ 79.4 a barrel.

Additional post by Naomi Rovnick in London

Unsecured – Markets, finance and strong opinion

Robert Armstrong dissects the major market trends and discusses how Wall Street’s best minds react to them. Sign in here to have the newsletter sent straight to your inbox every weekday

Source link

By admin

Leave a Reply

Your email address will not be published.