Alibaba, Tencent lead tech retreat amid capital flight concerns as traders step up bets on Fed tightening

Traders stepped up bets on a full-point increase in Fed fund rate in meetings through June, after US consumer prices rose by the most in four decades in January

WuXi Biologics’s nightmare run continued as the stock lost almost 30 per cent this week after being put on the ‘unverified list’ with 32 other Chinese firms

2-MIN READ2-MIN

A man touches the bull statue outside a shopping mall in Beijing last year. Photo: AP

Published: 10:53am, 11 Feb 2022Updated: 5:17pm, 11 Feb 2022

Chinese technology stocks fell from a two-week high in Hong Kong, tracking losses in global equities, after the fastest US inflation in four decades prompted traders to step up bets on faster rate increases by the Federal Reserve.

The Hang Seng Tech Index sank 1.2 per cent at the close, trimming a weekly gain. A rally in property stocks limited the fall in the Hang Seng Index to 0.1 per cent. A local media report said China has loosened rules on the use of home presale funds to help ease a crunch in the industry.

Tencent Holdings lost 1.5 per cent while NetEase and Meituan declined by more than 2 per cent. WuXi Biologics extended a nightmarish run, bringing the slump to 29 per cent this week.

The Shanghai Composite Index lost 0.7 per cent, reversing an earlier gain of as much as 0.4 per cent.

US consumer prices rose 7.5 per cent in January, the government said on Thursday, stoking a rout in both equity and bond markets. Traders have priced in an 80 per cent probability of a 50-basis-point increase in March, with an additional 25-basis point hike for May and June, according to forward Fed fund rates.