Tech, EV rebound gets HSI off to good start in June

Hong Kong stocks rose 323 points on the first trading day of June, thanks to the rebound of Tencent (0700), BYD (1211) and other tech and electric vehicle shares.

The Hang Seng Index rose 1.8 percent to close at 18,403 points yesterday.

Tencent climbed 4.2 percent after it refuted a report last week saying that the tech giant was asked to reduce its market share in China's mobile payment. Meanwhile, Thai entertainment platform GMM Music said yesterday Tencent and Tencent Music Entertainment (1698) will acquire a 10 percent stake in the company for US$70 million (HK$547 million), solidifying its spin-off plan.

This came as China's Ministry of Finance has allocated 6.44 billion yuan (HK$6.95 billion) to subsidize auto trade-ins in 2024, state television reported yesterday.

The amount of subsidies from the central government was disclosed after the commerce ministry announced in late April subsidies of up to 10,000 yuan apiece for scrapping old cars in exchange for new ones by the year-end, in an attempt to revive slowing demand in the world's largest auto market.

BYD jumped 5 percent while Li Auto (2015) increased 5.3 percent.

On other tech shares, Alibaba (9988) gained 2.3 percent as the e-commerce giant is expected to be included in the Stock Connect scheme with the mainland in September. Meituan (3690) grew 3.7 percent while JD.com (9618) added 2.6 percent.

Vitasoy International (0345) rose nearly 6 percent after it earlier expected a year-on-year growth of at least 1.32 times in net profit for the year ending in March.

Langham Hospitality Investments (1270) slumped 38 percent after announcing that Great Eagle (0041) abandoned the possible privatization plan.

Wharf Real Estate Investment Company (1997) fell nearly 2 percent after Jefferies downgraded its rating and target price for the company.

Separately, China lifted a cap on foreign securities investments for the first time since July, in a move that may help satisfy some of the surging demand for overseas assets even as Beijing seeks to bolster domestic markets.

The State Administration of Foreign Exchange approved a total quota of US$167.8 billion for qualified domestic institutional investors as of end-May, according to data from the agency's website. That represents the first increase since July, when the limit was lifted to US$165.5 billion, according to data compiled by Bloomberg.