HSBC, AIA, Country Garden lead decline in Hong Kong stocks as Hang Seng Index hits lowest level since December

HSBC falls by nearly 5 per cent after it announced on Monday it will buy Silicon Valley Bank’s UK subsidiary
Positive remarks about economic growth by new Chinese Premier Li Qiang do little to spur investors

China stock market

Mia Castagnone

Published: 10:35am, 14 Mar, 2023

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Hong Kong stocks fell as investors as markets continued to react to the collapse of Silicon Valley Bank (SVB) and investors moderated their response to positive remarks on economic growth by China’s new premier.

The Hang Seng Index fell 2.3 per cent to 19,247.96 at the close on Tuesday, the lowest level since December 21. The Tech Index slid 2.6 per cent, while the Shanghai Composite Index lost 0.6 per cent.

HSBC sank 4.7 per cent to HK$53.65, after the bank announced on Monday that it would swoop in to buy SVB’s UK subsidiary for a nominal £1. Insurer AIA Group plunged 4.4 per cent to HK$80.75, heading for the lowest close since Nov. 30.

Alibaba Group Holding dropped 3.9 per cent to HK$80, Baidu fell 3.7 per cent to HK$129 while Tencent slid 0.9 per cent to HK$341.60.

Developer Country Garden plunged 4.3 per cent to HK$2.01 following a profit warning on Monday, while peer Longfor Group lost 5.2 per cent to HK$20.10.

Limiting losses, Shanghai-based chip maker SMIC surged surged 7 per cent in Hong Kong and 10.1 per cent in Shanghai on optimism that China will ramp up the campaign of tech self-sufficiency amid impending export curbs on chipmaking machines by the Netherland.

03:24

China’s new premier Li Qiang outlines priorities in first press conference

“The market was too excited yesterday on risk sentiment and the new premier’s speech,” said Willer Chen, senior analyst at Forsyth Barr Asia in Hong Kong. “The Hong Kong market rebounded too much compared to the reaction of US futures in Asia market trading time yesterday.”

Speaking on Monday at his first press conference after the conclusion of the National People’s Congress, Premier Li Qiang did not announce any concrete policies but said the new government is focused on “high quality growth”, “cooperative” US-China relations and opening up post-Covid.

Beijing’s announcement that the government would resume issuing nearly all types of visas for foreigners starting on March 15 did little to excite trade.

Elsewhere, markets tumbled as SVB’s global operations are being taken apart after the lender was taken over by US regulators on Friday.

Japan’s Nikkei 225 fell 2.2 per cent per cent, dragged by the banking sector, it is the most the index has tumbled since the onset of the Covid-19 pandemic. South Korea’s Kospi dropped 2.6 per cent and Australia’s S&P/ASX 200 lost 1.4 per cent.