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. Warning shot from China’s earnings season for stock bulls as UBS, JPMorgan see bumpy second-half ride “The uncertainty on the audit issues is an overhang and a key concern for the market,” said Cheng Yu, a fund manager at HSBC Jintrust Fund Management in Shanghai. Besides, “pressure on capital outflows is building up in Hong Kong markets because of the policy tightening in the US and China’s weak growth.” Alibaba is also expected to show a 61 per cent slump in earnings when it reports on Thursday, according to analysts tracked by Bloomberg. PC maker Lenovo Group and sportswear producer Li Ning and chip maker SMIC are due to report next week. Meanwhile, distressed developer China Evergrande failed to deliver on its promise of unveiling a restructuring plan by the end of July, a bad omen for offshore creditors as China’s housing market crisis deepened. The developer offered “preliminary principles,” without details on how to reorganise almost US$300 billion of liabilities. Nanjing Bestway Intelligent Co started trading in Shenzhen, with the stock falling 5.5 per cent to 67.23 yuan. Elsewhere across regional markets, stocks were marginally stronger. Benchmarks in Japan and Australia advanced at least 0.7 per cent while equities in South Korea rose less than 0.1 per cent.