Hong Kong stocks stall near 8-month high as traders mull cashing in on bull run

Hong Kong stocks wavered near an eight-month high as traders pondered whether to cash in on the bull run, while robust mainland tourism data for the holiday period helped support sentiment.

The Hang Seng Index slipped 0.2 per cent to 18,540.82 as of 10am local time, after rallying for 10 straight days to enter a bull market. The Tech Index declined 0.6 per cent while the Shanghai Composite Index added 0.1 per cent.

Gaming firm NetEase tumbled 1.5 per cent to HK$158.40, e-commerce giant Alibaba lost 0.4 per cent to HK$79.20 and rival JD.com declined 0.2 per cent to HK$127.20. Electric-car maker Li Auto weakened 2 per cent to HK$115.50 while Geely Auto lost 1 per cent to HK$9.81.

The city’s benchmark has advanced for 10 consecutive trading days, the best winning streak since a 14-day rally in 2018, as the accommodative policy stance that emerged from April’s Politburo meeting and the cheap valuations of local shares lured investors.

The Hang Seng Index finished Monday at 18,578.30, the highest level since September 4. Its 14-day relative strength index has risen above 70, a threshold at which analysts deem stocks overbought and ripe for a correction.

Meanwhile, robust tourism and mobility data for the five-day Labour Day holiday period suggests an economic rebalancing to consumption is continuing to play out. Total domestic tourist volume increased 7.6 per cent from a year ago and 28.2 per cent from the level in 2019, before the Covid-19 pandemic, according to the Ministry of Culture and Tourism.

Domestic tourists spent a total of 166.89 billion yuan (US$23.56 billion), up 12.7 per cent on the year and a 13.5 per cent increase compared to the same period in 2019.

Other key Asian markets mostly traded higher, tracking overnight gains in the US. Japan’s Nikkei 225 climbed 1 per cent and South Korea’s Kospi rose 1.9 per cent, while Australia’s S&P/ASX 200 added 0.4 per cent.

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