Shares in Hong Kong made their biggest daily jump in over a month Thursday, as strong earnings lifted shares of Chinese technology firms listed in the city.
The Nikkei 225 inched up 6.38 points, or 0.1%, to 19,691.39,
In Hong Kong, the Hang Seng broke out of its funk in a big way, ballooning 536.75 points, or 2.4%, to 22,888.92, the largest daily percentage jump since Oct. 7. Still, the benchmark is off 1.5% from its recent peak on Oct. 23 and down 3% year-to-date.
Analysts say one factor encouraging investors to pile in is that Chinese firms listed on the mainland are still much more expensive than
Hong Kong-listed counterparts. The difference in value has reached its highest premium since early September.
The Hang Seng Index trades at a ratio of 8.75 price-to-earnings while the Shanghai Composite Index trades at 15.14 times. Yuan-denominated mainland stocks, or A-shares, are currently 38% more expensive than H-shares, Chinese firms trading in Hong Kong.
The Hang Seng Index is up 1% month-to-date and 11% higher than its low in late September.
The Hang Seng’s gains Thursday were broad-based, although shares of Tencent Holdings Ltd. and Semiconductor Manufacturing International Corp. sped ahead of the market, rising 2.2% and 14.3%, respectively.
Hong Kong’s gains also can be pinned to strong earnings, robust results for Wednesday’s online shopping spree, China’s Singles’ Day, and optimism MSCI Inc. will include U.S.-listed Chinese companies in its emerging markets and China indexes for the first time in its decision later Thursday.
In early June, MSCI held back from including Chinese A-shares from its indexes.
On Thursday, Hong Kong-listed chip maker SMIC reported third-quarter revenue reached a record high of $569.9 million U.S. The company’s 32% gross margin surpassed its original guidance of 28% to 30%.
Shares of Tencent, which earlier in the week reported a 32% rise in its third quarter net profit from the previous quarter, rose after strong Singles’ Day results.
Tencent is the only major Chinese e-commerce firm that trades on the Hong Kong stock market; most others trade in New York.
New York-listed Alibaba Group Holding Ltd, which launched Singles’ Day in 2009, reported sales on its online marketplaces rose 54% from a year earlier to $14.3 billion U.S., smashing last year’s 24-hour record total of $9.3 billion U.S.—itself a global high for an online shopping day.
Hong Kong shares also rose after Morgan Stanley upgraded its outlook on the MSCI Hong Kong Index in a report Wednesday. The bank said the benchmark has tended to outperform its Asia ex-Japan counterparts when U.S. yields have risen in the past, and will benefit as pressure from the selloff in China reverses course.
In Australia, the local dollar gained more than 1% against the U.S. dollar after the nation’s unemployment rate fell sharply, to 5.9% in October from 6.2% a month earlier. The Australian dollar traded as high as 71.53 U.S. cents compared with 70.58 U.S. cents late in Asia on Wednesday.
Shares in Australia recovered from losses in the morning, after an overnight fall in U.S. oil prices weighed on the energy sector. Energy shares on Australia’s S&P/ASX 200 fell 3%.
The Japanese yen has started to strengthen in recent sessions after reaching its lowest since late August, as the dollar rallies. It traded at ¥122.87 to one U.S. dollar, roughly flat from its late level Wednesday in Asia. It was as weak as ¥123.59 earlier this week.
In other markets
Markets in New Zealand were shuttered for holiday
The CSI 300 in Shanghai moved lower 38.32 points, or 1%, to 3,795.32
In Singapore, the Straits Times Index dumped 22.58 points, or 0.8%, to 2,959.01
The Kospi index in Korea demurred 3.91 points, or 0.2%, to 1,993.36
Taiwan’s Taiex index regained 13.08 points, or 0.2%, to 8,428.09
The ASX 200 edged up 3.07 points, or 0.1%, to 5,125.69
