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Shares in Chinese tech giant Tencent are up slightly in Hong Kong after the company revealed it had taken a 5 per cent stake in electric carmaker Tesla.

The move, which would mark a major step towards breaking into the connected car market, follows Tencent’s previous forays in the automotive industry, including investments in Chinese ride-hailing company Didi Chuxing and mapping group Here.

Tencent shares gained 0.8 per cent in Hong Kong, where it is the biggest weighting within the benchmark Hang Seng, which was up 0.2 per cent. Shares had been up by as much as 1.9 per cent.

The Chinese internet group said in a regulatory filing on Tuesday with the US Securities and Exchange Commission that it held almost 8.2m shares in Tesla – or a 5 per cent stake in the company – making it the carmaker’s fifth-largest shareholder.

Shares in Tesla, whose $45.3bn market capitalisation is about one sixth that of Tencent, finished 2.7 per cent higher in the US on Tuesday.

Copyright The Financial Times Limited 2017. All rights reserved.
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