Hong Kong stocks notch biggest daily gain in 21 months on tech rally
By Summer Zhen
HONG KONG, Nov 5 (Reuters) - Hong Kong stocks posted the biggest daily gain in 21 months, while China shares inched higher on Thursday as market sentiment recovered after the US midterm elections.
Hong Kong's benchmark Hang Seng Index .HSI closed 3.7% higher, marking its biggest single-day advance since February 2025
Hang Seng Tech .HSTECH surged 5.6%, with index heavyweights Alibaba 9988.HK and Tencent 0700.HK gaining more than 8% and 7%, respectively
The gains tracked Wall Street's overnight rally as investors welcomed lower uncertainty after US midterm elections
"China and Hong Kong remain relatively attractive," Morningstar analysts said in an investment outlook on Thursday, following an October correction in which the Hang Seng Index dropped 5% and the CSI 300 declined 9%
The pullback may also create rebound opportunities in heavily sold quality names where AI concerns, rather than weaker fundamentals, drove the decline, said Lorraine Tan, director of equity research for Asia at Morningstar, which is bullish on Alibaba and Tencent
The rally was also backed by the rebound in property stocks .HSMPI after Zhuhai Huafa Group received funding from its local government
In A-shares, China's blue-chip CSI300 Index .CSI300 closed 0.3% higher, while the Shanghai Composite Index .SSEC was up 0.1%.
By sector, investors favored solar power .CSI931151, semiconductors .CSI931743 and new energy .CSI399808, but sold oil .CSIEN and optical communication shares .CSI000916
"China's domestic technology supply chain may become further differentiated" after Democrats' sweeping midterm election win, said Cliff Zhao, chief economist at CCB International
Hardware exporters that depend heavily on US AI capex may be affected, while GPUs, semiconductor equipment, advanced packaging and computing-infrastructure may continue to benefit from technological self-reliance needs, he added
State-backed oil producer PetroChina 601857.SS fell 8% on weakening oil prices as Democrats' victory raised hopes for an end to the US-Iran war.
The smaller Shenzhen index .SZSC was up 1.6%, the startup board ChiNext Composite index .CNT was higher by 0.9% and Shanghai's tech-focused STAR50 index .STAR50 was up 1.7%