South China Morning Post
Hong Kong stocks advanced at the start of the new week, as traders shook off a bout of jitters over rising coronavirus cases and the prospect of a slower pace of economic recovery in the US.The Hang Seng Index found its footing to end at the lunch ahead by 0.9 per cent at 25,963.07, with finance companies leading gains and property stocks picking up after from the morning’s slump.High turnover stocks were Tencent, China’s social media and online gaming giant, which turned up to advance by 0.3 per cent to HK$548, and Alibaba, the country’s e-commerce titan and the owner of the South China Morning Post, which slipped 0.4 per cent to HK$254.40.Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.Daiwa Capital Markets reiterated its buy on Alibaba and boosted the 12-month target price to HK$294 from HK$260, or a 15.1 per cent jump from Friday’s close. Analyst John Choi said he expects Alibaba will post a “solid” quarter, with its revenue growing 30 per cent year-on-year when it reports next month.How long will Hong Kong’s bull market last?On the mainland, the Shanghai Composite Index also struggled initially for direction, but gained 1.3 per cent to 3,426.21 at the lunch break. Concern is growing over whether China stocks have risen too much and too quickly, raising the spectre of the 2015 meltdown in mainland markets fuelled by irrational exuberance and margin trading.A commentary published by state-owned Securities Times cautioned investors against chasing the rally as market sentiment has turned into a bullish mood.It urged individual investors to focus on companies’ fundamentals, adding that only those firms with solid earnings were good buys.“It is not a bull market yet unless the Shanghai Composite Index breaks through the 3,500-point level,” said Zhou Ling, a fund manager with Shanghai Shiva Investment. “It is important for the official media organisations to play down investors’ expectations for a strong rally at this moment.”Kweichow Moutai, one of the most popular stocks traded on the Hong Kong-mainland Stock Connect, advanced 2.8 per cent to 1,761.48 yuan.US futures were positive.Investors in Hong Kong began the second week of the newborn bull market, as mainland money has poured in and a total of 24 initial public offerings are slated for this month. Sentiment overall remains positive, with the Hang Seng Index seeing back-to-back weekly gains and on track for a monthly gain.A cloudy earnings season kicks off in the US this week, while in Hong Kong, Covid-19 cases surged and a primary election over the weekend for democratic opposition candidates for the Legislative Council was swamped with hundreds of thousands of voters at a time when Beijing is tightening its grip over the city.Meanwhile, US President Donald Trump, whose re-election bid looks increasingly in danger, signalled he is not in a rush for a phase two trade deal with China, the latest sign of souring relations between the world’s two largest economies, which he described as “severely damaged”.On the mainland, two companies debuted.Sihui Fuji Electronic Technology, which makes printed circuit board products, opened 20 per cent higher, trading at 39.67 yuan.The company listed on the ChiNext market soon surged to the 44 per cent first-day upper limit, hitting 47.60 yuan with 30-minute trading suspension triggered.Bearings manufacturer Luoyang Xinqianglian Slewing Bearing jumped 20 per cent to 23.59 yuan when trading started before climbing further to 26.41 yuan, 34.3 per cent higher than its IPO price.Additional reporting by Daniel RenPurchase the 100+ page China Internet Report 2020 Pro Edition, brought to you by SCMP Research, and enjoy a 30% discount (original price US$400). The report includes deep-dive analysis, trends, and case studies on the 10 most important internet sectors. Now in its 3rd year, this go-to source for understanding China tech also comes with exclusive access to 6 webinars with C-level executives. Offer valid until 31 August 2020. To purchase, please click here.More from South China Morning Post: * Alibaba overtakes Facebook as world’s sixth-most valuable company after shares soar by 10 per cent in Hong Kong * Hong Kong’s Hang Seng Index went from bear to bull in just over three months. What stock investors need to know nowThis article Hong Kong’s Hang Seng Index rises after two straight weeks of gains, even as traders face coronavirus jitters first appeared on South China Morning PostFor the latest news from the South China Morning Post download our mobile app. Copyright 2020.