Hong Kong stocks slide on earnings shock as Geely, Galaxy add to disappointment while Meituan extends rebound

Name: Shanghai Ikea shoppers scramble for the exits during flash Covid shutdown
Uploaded: 2022-08-18T02:35:34.000Z
Duration: 1 min 52 s
Description: Shanghai Ikea shoppers scramble for the exits during flash Covid shutdown

NetEase slipped before publishing its interim report, while Galaxy and Geely Auto post disappointing results

Reports from Tencent and bourse operator HKEX both underwhelmed on Wednesday, showing the impacts from economic slowdown

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People walk past a screen displaying the Hang Seng stock index at Central district, in Hong Kong on July 19. Photo: Reuters

Zhang Shidong

Published: 10:35am, 18 Aug 2022Updated: 4:50pm, 18 Aug 2022

Hong Kong stocks fell as traders braced for more corporate earnings disappointment after weaker-than-expected reports from industry bellwethers like Geely Auto and Galaxy Entertaintment amid an economic slump. Meituan extended a rebound.

The Hang Seng Index fell 0.8 per cent to 19,763.91 at the close, the lowest level in a week. The Hang Seng Tech Index lost 1.1 per cent, while the Shanghai Composite Index slipped 0.5 per cent.

Macau casino operator Galaxy retreated 2.1 per cent to HK$46.25 after posting HK$850.5 million (US$108.4 million) in interim loss. Geely Auto fell 3.1 per cent to HK$16.82 as first-half profits trailed market estimates. Developers Country Garden and China Overseas Land & Investment both fell by at least 2.9 per cent amid lingering concerns about China’s housing market slump.

Mobile game developer NetEase slid 1.6 per cent to HK$142 before its report card later on Thursday. Second-quarter profit probably increased 17 per cent from a year earlier, according to analysts tracked by Bloomberg.

“The effects of pandemic flare-up and worries about a global recession are now being felt,” said Dang Chongyu, an analyst at Sealand Securities. “Hong Kong stocks may still need to digest all these headwinds and consolidate in the third quarter. The fourth quarter may be better for stocks when the negative factors fade.”

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Shanghai Ikea shoppers scramble for the exits during flash Covid shutdown

China’s economy wobbled last quarter when growth slowed to 0.4 per cent from a year earlier versus 4.8 per cent in the preceding quarter amid sporadic lockdowns and a housing market slump. Gross domestic product shrank 1.3 per cent in Hong Kong, on top of a 3.9 per cent contraction in the first three months of the year.