Hong Kong stocks rebound from 11-week low on HSBC earnings surprise while Alibaba, China manufacturing data weigh on market

US market regulator put Alibaba on a watch list for delisting on Friday, the highest profile Chinese company yet, over ongoing audit inspection issues

HSBC surged to overturn earlier losses after quarterly earnings exceeded market consensus on the back of deferred tax benefits

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A woman walks past a bank’s electronic board showing the Hang Seng Index on June 6. Photo: AP

Published: 10:19am, 1 Aug 2022Updated: 4:48pm, 1 Aug 2022

Hong Kong stocks advanced as HSBC surged after reporting a stronger than expected earnings, lifting the market from an 11-week low. Prices fell earlier on Alibaba Group Holding delisting pressure and data showing Chinese manufacturing shrank in July.

The Hang Seng Index rose less than 0.1 per cent to 20,165.84 at the close of Monday trading. The index earlier fell as much as 1.4 per cent to the lowest level since May 13. The gauge slumped 7.8 per cent in July, the worst month in a year. The Hang Seng Tech Index lost 0.2 per cent while the Shanghai Composite Index also added 0.2 per cent.

HSBC soared 5 per cent to HK$51.85, the most since February 4, after earnings jumped 61 per cent last quarter as the UK lender tapped into US$1.8 billion of deferred tax benefits. Its subsidiary Hang Seng Bank climbed 2.9 per cent to HK$130.20.

Alibaba, which owns this newspaper, lost 3.8 per cent to HK$89.60 after the US Securities and Exchange Commission on Friday included it in a delisting watchlist over audit inspection issues. Other tech peers also weakened, with Tencent Holdings losing 2.4 per cent to HK$299.60 and NetEase easing 0.6 per cent to HK$143.90.

Stocks earlier fell after China’s official Purchasing Managers’ Index (PMI) on manufacturing slipped to 49 from 50.2 in June, underlining disruptions brought on by the nation’s zero-Covid policy. The non-manufacturing gauge weakened t0 53.8 from 54.7.