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A man looks at his smartphone in front of a screen showing stock prices in a brokerage house in Shanghai. Photo: AP

Hong Kong stocks slide by most in 3 weeks as Taiwan risk, China manufacturing data hobble markets, BYD sell-off persists

  • A private sector report showed manufacturing shrank in August, while report of drone shooting heightened cross-strait tensions
  • BYD slipped again while Bosideng suffered a 8.4 per cent beating as major shareholders cut stakes
Hong Kong stocks slipped by the most in three weeks after a private sector report showed China’s manufacturing contracted in August as stimulus failed to re-energise the industry. Losses deepened amid renewed concerns about cross-strait tensions.

The Hang Seng Index retreated 1.8 per cent to 19,597.31 at the close, the biggest decline since August 10. The benchmark fell 1 per cent in August, a second month of retreat. The Hang Seng Tech Index sank 1.6 per cent while the Shanghai composite Index slipped 0.5 per cent.

Meituan tumbled 5.9 per cent to HK$178.70, leading index decliners on renewed speculation Tencent will trim its holding. Orient Overseas slumped 7.5 per cent to HK$160. Budweiser Brewing lost 5.6 per cent to HK$21.85 while BYD suffered an extended sell-off with a 4 per cent slide to HK$232.60.
Losses deepened after Taiwanese forces shot down an unidentified drone over Shiyu off the coast of mainland China. Tension boiled over last month when US House Speaker Nancy Pelosi visited Taiwan, prompting the Chinese army to conduct live-fire military drills surrounding the island.
The market started on a weak footing after a report showing the Caixin PMI Manufacturing Index slipped to 49.5 in August, snapping a two-month expansion. Reading below 50 indicates contraction. A similar gauge released by China’s statistics bureau showed it also contracted for a second straight month in August.

“The economic recovery momentum seems to be fading,” said Zhou Jianhua, an analyst at Central China Securities. “The issue is that aggregate demand is weak, with weakening consumption and a slumping property market. Even if the growth-stabilising measures are stepped up, the recovery will still be weak this quarter.”

The past month proved to be turbulent for traders eyeing a reversal in sentiment. Cross-strait tensions, power shortages and the flare-up in Covid-19 outbreaks in Hainan island and Shenzhen have combined to dent risk appetite.

In the latest move, China will lock down Chengdu, the capital of southwestern Sichuan province, from 6pm local time on Thursday, where there has been a spike in new infections and a series of power cuts.


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Elsewhere, China’s biggest down apparel maker Bosideng sank 8.4 per cent to HK$4.05 after New Surplus International Investment, a company controlled by founder and CEO Gao Dekang, plans to sell 230 million shares or a 2.1 per cent stake at HK$3.94 each.

Biocytogen Pharmaceutical Beijing rose 3.1 per cent to HK$26 on its first day of trading in Hong Kong. Hangzhou Langhong Technology dropped 0.2 per cent to 16.97 yuan in Beijing, while fellow debutant Kunming Hendera Science and Technology surged 51 per cent to 8.77 yuan.

Other major benchmarks in Asia-Pacific slid before a US job report on Friday that is likely to show strong growth and reinforce rate-hike expectations. Japan’s Nikkei 225 fell 1.5 per cent, and South Korea’s Kospi and Australia’s equity gauge tumbled at least 2 per cent.