Hong Kong stocks erase gains as Meituan slips on antitrust probe in big week for HSBC, HKEX earnings

Name: China kicks off antitrust probes into Alibaba over alleged monopolistic practices
Uploaded: 2021-04-26T02:50:57.000Z
Duration: 1 min 26 s
Description: China kicks off antitrust probes into Alibaba over alleged monopolistic practices

HSBC, Standard Chartered and bourse operator HKEX are among a dozen of big first-quarter earnings reports due this week

The State Administration for Market Regulation says it is probing Meituan, more than two weeks after slapping a record fine on Alibaba

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People walk past a bank’s electronic board showing the Hang Seng index in Hong Kong on March 24. Photo: AP

Zhang Shidong

Published: 10:50am, 26 Apr 2021Updated: 5:31pm, 26 Apr 2021

Hong Kong stocks fell for the first time in three days as Meituan slumped after it became the next Chinese tech company to face an antitrust probe. The news overshadowed hopes for earnings upside from index members including lender HSBC.

The Hang Seng Index lost 0.4 per cent to 28,952.83 at the close on Monday, after earlier climbing as much as 0.5 per cent. China Mengniu Dairy and Geely Automobile were also among big losers. The Shanghai Composite Index slid 1 per cent.

Meituan, the fifth-largest index constituent with a 5 per cent weightage, lost 0.5 per cent to HK$305, sliding in afternoon trading to reverse an earlier gain of 0.5 per cent. The State Administration for Market Regulation is probing a practice of forcing vendors to use its platform exclusively, according to an official statement.

The regulatory action followed a record US$2.8 billion fine the SAMR imposed on e-commerce group Alibaba Group Holding, the owner of this newspaper, earlier this month over a similar practice related to “er xuan yi” or pick one out of two.

The probe overshadowed hopes for an earnings boost this week and the outlook for sustained Federal Reserve support at its policy meeting this week. About a dozen of the index members from HSBC to bourse operator Hong Kong Exchanges and Clearing (HKEX) are due to release their report cards this week.

Average profit for the 55 constituents on the primary Hang Seng gauge probably rose by 26 per cent, according to Bloomberg data. Low-base effect may have accentuated gains due to the Covid-19 outbreak a year earlier. Beating the market consensus will be critical for the market to sustain an almost 4 per cent rebound from last month’s low.

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China kicks off antitrust probes into Alibaba over alleged monopolistic practices

“While positive surprises have supported the stock market, the trend on earnings is even more important,” said David Kelly, a strategist at JPMorgan Asset Management. On the Fed, “no actual changes in policy are expected” he added, saying it would prefer that markets “also assume no change in Fed thinking.”