Hong Kong stocks drop for a seventh straight day as fears grow about mainland Chinese coronavirus outbreaks

·3-min read

Hong Kong stocks fell for a seventh straight day, capping the longest losing streak in almost four months, as worries deepened about the Chinese economy and the worsening coronavirus outbreak in the mainland.

The Hang Seng Index fell 0.3 per cent to 25,024.75 at the close of Wednesday trading. The seven-day slide marked the benchmark’s worst sequence since July 8.

In the mainland, the Shanghai Composite Index lost 0.2 per cent. China’s Premier Li Keqiang warned of pressure on the economy while new locally transmitted cases spiked to a three-month high of 93 on Tuesday, prompting more frequent localised lockdowns.

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The Hang Seng Tech Index retreated 0.7 per cent, dragged down by a 6.4 per cent decline in Ping An Healthcare. Tencent Holdings erased earlier losses to gain 1.1 per cent as the tech giant unveiled development plans for three chips, while Meituan gained 2.2 per cent.

Chinese sportswear companies were the biggest gainers on the Hang Seng gauge. Li Ning jumped 6.7 per cent to HK$87.30, while Anta Sports Products rose 3 per cent to HK$122.20. Property developers Country Garden Holdings and Henderson Land racked up gains of at least 1 per cent.

Losers on Wednesday included solar power glass manufacturer Xinyi Solar, which crashed 7.3 per cent to HK$14.24, and miniature electronics supplier AAC Technologies, which slumped 3.8 per cent to HK$31.90. Shenzhou International Group, a Chinese knitwear manufacturer and exporter, declined 3.2 per cent to HK$160.10.

The Chinese economy saw weakness in October amid debt woes in the property market and an energy crisis that had weighed on manufacturing, while strict coronavirus controls were imposed to suppress fresh outbreaks.

A notice from the Chinese government released on Monday evening urging households to stock up on daily necessities has sparked widespread concern online about some recent Covid-19 outbreaks.

The market faces headwinds “with all of the three horse carriages showing signs of slowdown”, said Will Shum, portfolio management director in Hong Kong at iFast Financial, referring to China’s three main growth drivers of consumption, investment and exports.

China’s economy grew 4.9 per cent last quarter, down from the second quarter growth rate of 7.9 per cent. The economic slowdown is showing up in the books of publicly traded companies in the mainland, as profit growth slowed in the three months to September 30, based on data compiled by investment bank China International Capital Corp.

On the mainland, Beijing Dataway Horizon, a data analysis provider, surged 142 per cent to 46.82 yuan on its first day of trading in Shenzhen.

US equities rose overnight to record highs buoyed by strong corporate earnings.

Other major markets in Asia were mixed on Wednesday. The Australian stock benchmark advanced 0.9 per cent, equities in South Korea retreated 1.3 per cent, while Japanese markets were closed for a holiday.

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