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Hong Kong stocks retreated after reaching a three-week high, with investors expressing caution regarding the sustainability of the week's brief rally, which was driven by support from state funds.
Market participants redirected their focus towards potential earnings surprises, particularly from Alibaba Group, following robust earnings reports from several other industry leaders.
Market Performance
At the local noon trading break, the Hang Seng Index remained relatively unchanged at 16,124.92, following a surge of up to 1.7%, its highest level since January 11. The Tech Index recorded a gain of 2.2%, while the Shanghai Composite Index increased by 0.9%.
Alibaba Group encountered a 1.4% decline to HK$74.95, reversing an earlier 1.4% gain amidst expectations of quarterly income surpassing forecasts. Meanwhile, WuXi Biologics surged by 7.3% to HK$19.48, and its affiliate WuXi AppTec gained 6.7% to HK$52.30 as they accelerated repurchases following recent sell-offs.
Analyst Projections
Analysts anticipate a 20% increase in net income for Alibaba Group, reaching nearly 48 billion yuan (US$6.7 billion) in the quarter ending on December 31.
According to the South China Morning Post, other earnings reports, including those from fast-food chain operator Yum China and chip maker SMIC, exceeded consensus forecasts.
This week, the Hang Seng Index's nearly 4% turnaround reflects traders' expectations of state-run funds stabilizing the market amidst reassessments by China's top leadership and regulators. Mainland China's financial markets will close for the Lunar New Year from February 9 to 16, while Hong Kong's trading hours will be shortened on February 9 and closed from February 12 to 13.
Market Developments in Other Asian Countries
According to Asia Financial, elsewhere in Asia, major markets witnessed mixed performance, with Japan's Nikkei 225 slipping by 0.2%, South Korea's Kospi rising by 1.7%, and Australia's S&P/ASX 200 adding 0.7%.
Additionally, Chengdu Sino-Microelectronics Tech, a maker of integrated circuits, debuted on Wednesday, experiencing a 33% jump in Shanghai.
Photo: Cheung Yin/Unsplash
