Hong Kong Tech Stocks Soar on Hopes for Easing U.S.-China Tensions
November 04 2020 - 11:46PM
Dow Jones News
By Yifan Wang
Hong Kong technology stocks rose sharply in morning trade,
buoyed by investors' hopes for a potential easing in U.S.-China
tensions even though the outcome of the U.S. presidential election
isn't clear yet.
The Hang Seng Tech Index tracked as much as 5.0% higher to
8149.00 to hit a fresh all-time high by midday trade, in line with
overnight gains of the technology sector in the U.S. market.
"Overall the market thinks that the presidential election should
be over soon, so that overhang is going to be removed," said
Jefferies analyst Edison Lee.
A potential Joe Biden presidency may de-escalate current
conflicts over the tech industry between the world's two largest
economies. And even if President Trump is re-elected, the
administration will likely shift policy attention away from
China-related issues in the near term, Mr. Lee said.
"Previously, the focus on China was a campaign strategy," he
added.
Nearly all subsectors within the industry are rising, with
hardware companies leading gains. Cloud operator Kingsoft Corp.
surged 8.7%, chip maker Hua Hong Semiconductor Ltd. jumped 12%,
while smartphone-component supplier Sunny Optical Technology Group
Co. was up 7.2%.
Internet giant Tencent Holdings also rose 5.4% while its peer
Alibaba Group Holding rebounded 5.8% from Wednesday's losses due to
the sudden IPO suspension of its financial arm Ant Group Co.
Delivery firm Meituan and e-commerce platform JD.com Inc. both
hit all-time record highs, rising as much as 6.6% and 7.9%,
respectively.
The industry's upbeat momentum was supported by China's recently
unveiled new five-year plan, in which Beijing placed clear emphasis
on technological development as one of the country's top economic
priorities.
"China is very keen, very determined to continue to localize and
focus on technology development," said Mr. Lee. "Although not every
company will necessarily benefit, I think the market will just buy
the sector right now."
Write to Yifan Wang at yifan.wang@wsj.com
(END) Dow Jones Newswires
November 04, 2020 23:31 ET (04:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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