Hong Kong stocks slumped with Chinese tech juggernauts suffering the worst setback in three weeks on concerns about weaker earnings amid a slowdown in the world’s second-largest economy.
The Hang Seng Index retreated 1.3 per cent to 25,319.72 at the close of Thursday trading. The city’s tech benchmark sank 3 per cent, the most since a 3.2 per cent setback on October 27. The Shanghai Composite Index lost 0.5 per cent.
Stocks took a beating as traders locked in a 14 per cent rebound in tech firms from this year’s low in October. The rally over the past month came to a halt amid poor earnings at Big Tech after a year-long crackdown, while China’s economy lost momentum. Tencent Holdings last week reported the slowest earnings growth in two years.
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Alibaba, the owner of this newspaper, tumbled 5.3 per cent, the most in 10 weeks, before the e-commerce group’s earnings report later Thursday, while its health unit crashed 6.1 per cent.
Rival JD.com, which also reports on the same day, fell 3.6 per cent. Food delivery platform operator Meituan slipped 2.5 per cent before its report card next week.
“Alibaba’s core business is expected to be under pressure because of weak consumer spending,” said Jiao Juan, an analyst at Essence Securities in Shanghai. ”Headwinds such as the sporadic outbreak of the pandemic and flooding have chipped away at spending impetus.”
Investors were forewarned by several weak reports overnight. Search engine operator Baidu sank 7.8 per cent after it slumped to a 16.6 billion yuan (US$2.6 billion) loss, from a profit of 13.7 billion yuan a year earlier. Video-streaming operator Bilibili plunged 11 per cent after losses widened to 2.7 billion yuan from 1.1 billion yuan.
Major developers also declined. China Evergrande fell 5.7 per cent after it exited from HengTen Networks on Thursday to replenish its cash. Country Garden lost 5 per cent, after its property services unit halted trading. Media reports said the unit was seeking to raise funds through a stock sale.
Three firms started trading for the first time on the mainland bourses. ACM Research (Shanghai), a semiconductor manufacturer, jumped 53 per cent. Assure Tech, which develops and produces testing reagents, rose 13 per cent. Hunan Hengguang Technology, a chemical manufacturer, surged 160 per cent.
Markets in Asia-Pacific were mixed on Thursday. Australian equities rose 0.1 per cent, while the Japanese and South Korean benchmark fell 0.3 and 0.5 per cent respectively.
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