Hong Kong stocks waver as three-day slide in Chinese tech leaders sours new year rally

Name: Tesla owners in China protest against price cuts as consumers tighten budgets
Uploaded: 2023-01-12T02:41:07.000Z
Duration: 2 min 1 s
Description: Tesla owners in China protest against price cuts as consumers tighten budgets

Stock benchmark and some index leaders are trading at levels that suggest a technical reversal is imminent

China’s top-selling electric-car maker BYD surged on sales outlook as consumer-facing businesses win favour among investors

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People walk past a screen displaying stock prices outside the Exchange Square in Central, Hong Kong. Photo: Reuters

Mia Castagnonein Hong KongandZhang Shidongin Shanghai

Published: 10:41am, 12 Jan 2023Updated: 4:55pm, 12 Jan 2023

Hong Kong stocks wavered as a three-day slide in Chinese tech leaders including Alibaba Group and Baidu retreated from overheated levels following rapid gains in the new year. An official report showed inflation quickened in China, hurting policy-easing outlook.

The Hang Seng Index rose 0.4 per cent to 21,514.10 at the close of Thursday trading, after swinging between gains and losses during the day. The Tech Index fell 1.3 per cent, and its three-day decline of almost 2 per cent was the worst in two months. The Shanghai Composite Index slipped 0.2 per cent.

Alibaba lost 1.9 per cent to HK$110.80 and Tencent Holdings retreated 2.6 per cent to HK$364 while Baidu eased 0.9 per cent to HK$132.60. Like the Hang Seng barometer, their relative strength index readings surpassed 70 points this wee, suggesting a pullback was immiment.

“In the short run, most of the tailwinds have been factored into stock prices,” said Cheng Yu, a fund manager at HSBC Jintrust Fund Management in Shanghai. “Hong Kong’s market will most probably be in for wild swings” given the massive gains so far this year, he added.

Limiting losses, China’s top-selling carmaker BYD surged 5.2 per cent to HK$228.40 while rival Geely Auto jumped 1.8 per cent to HK$12.24 and Nio added 0.6 per cent to HK$89.20. All three, however, pared gains. Oil explorer PetroChina gained 3.9 per cent to HK3.75 as crude prices logged best winning run since October on demand outlook.

Stocks in Hong Kong and mainland China have added more than almost US$900 billion in capitalisation this year as global funds chased China reopening beneficiaries. Beijing started dismantling its zero-Covid regimen in November and officially abandoned the policy when it scrapped quarantines for arrivals on January 8.

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Tesla owners in China protest against price cuts as consumers tighten budgets

“Although China-sensitive assets have rallied sharply on the country’s swift reopening, we don’t believe the full growth boost of reopening has been fully priced,” Goldman said in a report to clients on Thursday. “We see significant upside for Chinese equities.”