HK stocks near 25,000 as tech trio hit over price war
The Hang Seng Index ended on Monday at 24,994.14 with gains of 168.48 points or 0.68 percent. File photo: RTHK
Mainland China stocks closed near a three-and-a-half-year high on Monday, led by the rare earth and construction sectors, while Hong Kong stocks rose as internet heavyweights rallied following a government rebuke on price wars.
In Hong Kong, the benchmark Hang Seng Index ended up 168.48 points, or 0.68 percent, at 24,994.14.
The Hang Seng China Enterprises Index rose 0.6 percent to end at 9,040.20 and the Hang Seng Tech Index jumped 0.84 percent to 5,585.50.
Platform companies Meituan, JD.com and Alibaba rose between 1.8 and 2.7 percent after Beijing summoned the three and asked them to cool a bruising price war, a move dubbed by investors as an "anti-involution" campaign.
Positive catalysts from anti-involution policies and strength in the tech sector have lifted sentiment, which together with a solid economic foundation have fuelled the market rally that's surprising in its timing yet reasonable, Huatai Securities said.
On the mainland, the benchmark Shanghai Composite Index rose 0.72 percent to 3,559.79 while the Shenzhen Component Index closed 0.86 percent higher at 11,007.49.
Combined turnover at these two indexes stood at 1.7 trillion yuan, up from 1.57 trillion yuan on Friday.
Stocks related to cement and building materials led gains, while stocks related to cross-border payments and the banking sector suffered major losses.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 0.87 percent to close at 2,296.88.
Leading the gains onshore, the CSI Construction & Engineering Index rallied 4.3 percent to a seven-month high after China began construction on a US$170 billion hydropower dam in Tibet.
The project is macro relevant and could provide some demand support, likely easing concerns on growth and the labor market marginally, Citi analysts said in a note.
Also lifting markets, the rare earth sector advanced 3.2 percent following a report that Beijing has quietly issued its first 2025 rare earth mining and smelting quotas.
Looking ahead, Chinese policymakers are expected to hold the July Politburo meeting in the coming days to discuss economic policies for the second half of this year.
Goldman Sachs analysts said they don't expect broad-based, significant stimulus in the near term, but anticipate continued policy pledges to regulate disorderly price competition and contain the "involution". (Reuters/Xinhua)
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