Hong Kong stocks slid for a fourth day toward a six-year low as surging energy costs induced by the Russia-Ukraine war heightened recession fears. Traders bet China will step up stimulus efforts as higher oil prices are seen undermining its growth target. The Hang Seng Index fell 0.7 per cent to 20,627.71 at the close, capping an 8.2 per cent loss over four days in the market’s worst run this year. The Tech Index gained 0.3 per cent, reversing a 3.4 per cent intraday loss, while the Shanghai Composite Index declined 1.1 per cent. Chinese sportswear maker Li Ning slumped 9.4 per cent after Norway’s sovereign wealth fund excluded the stock for investment, citing human right violations. Anta Sports and Country Garden slumped more than 7 per cent. Alibaba Group dropped 0.7 per cent. The latest slump pushed almost 40 per cent of the Hang Seng Index members into an oversold territory, the highest proportion in two years, according to Bloomberg data. Other major markets in Asia-Pacific stabilised, with stock gauges in Australia and Taiwan posting gains. Crude oil futures traded around US$120 a barrel, approaching the 2008 peak while prices of nickel and wheat surged to record highs this week. The US and UK plan to ban oil imports from Russia amid widening sanctions. Slower growth amid runaway inflation could drag economies into a recession, strategists at Alpine Macro has said. Stocks linked to Chinese tycoon’s wrong bets on nickel lose US$7.3 billion in value as business ties come under scrutiny “There is still plenty of pain out there amid the crazy volatility,” said Stephen Innes, a partner at SPI Asset Management. “The longer commodities stay trading at such elevated levels, the probability of stagflation is rapidly increasing. It is too early to bottom fish.” Goldman Sachs raised its average Brent forecasts to US$135 a barrel for 2022 and US$115 for 2023, citing the Ukraine conflict, up from old estimates of US$98 and US$105, respectively. A US$20 jump in crude could clip China’s GDP growth by 0.3 percentage point, it estimates. The forecasts “underscores the importance for [China’s] policymakers to step up easing measures to offset the potential additional drags from geopolitical uncertainties and surging commodity prices,” Goldman economists said in a report on March 8. A statistics bureau report on Wednesday showed gains in producer prices slowed to 8.8 per cent last month from 9.1 per cent in January. Consumer prices climbed 0.9 per cent, unchanged from a month earlier. China reported more than 500 daily Covid-19 infections for a third day in a row on Monday, casting a pall on the economy that is already grappling with a slowdown. Elsewhere, Zhejiang Huayou Cobalt plunged by the daily 10 per cent limit for a second day in Shanghai, erasing 26 billion yuan (US$4.1 billion) of market capitalisation. The cobalt producer is a business partner with Tsingshan Holding Group, which is said to be facing steep losses for its wrong bets on nickel prices.