Xpeng, BYD skid as Hong Kong stocks rattled by wider Covid-19 lockdowns in China, earnings setback
- Chinese property developers and electric-car makers led losses, after a string of pandemic-hit home sales and earnings reports
- Other Asia markets were mixed as traders await a US job report that could entrench higher interest-rate bias among Federal Reserve policymakers
The Hang Seng Index declined 0.7 per cent to 19,452.09 at the close, the lowest close in a week. The index lost 3.6 per cent for the week. The Hang Seng Tech Index slipped 1.4 per cent, while the Shanghai Composite Index added 0.1 per cent.
Chinese property developers also declined after a string of pandemic-hit earnings reports Country Garden Holdings slumped 6.1 per cent to HK$2.17, and China Overseas Land and Investment retreated 2.3 per cent to HK$20.95.
“Repeated lockdowns have hurt market sentiment,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “That has added to investors’ concerns about the outlook of the economy, which has already been battered by rising raw-material costs and shrinking demand. Such a scenario will continue to put corporate earnings at risk.”
Key districts in Shenzhen, including Nanshan where many hi-tech companies are located, have been placed under semi-lockdowns for at least three days to contain the spread of Covid-19 infections. The southern tech hub reported 87 cases on Thursday, the highest daily case in about six months.
That coincided with the lockdown of Chengdu, the capital city of the southwest Sichuan province. The city, with a population of 21 million, went under confinement at 6pm on Thursday and all residents were required to take nucleic acid tests.
Four companies started trading on the mainland’s exchanges on Friday. Shanghai OPM Biosciences jumped 59 per cent to 127.24 yuan in Shanghai and Shandong Xinjiufeng Technology Packaging surged 13 per cent to 20.49 yuan in Shenzhen. Focus Hotmelt dropped 12 per cent to 46.51 yuan in Shenzhen and Nanjing Liandi Information Systems lost 2.6 per cent to 7.79 in Beijing.
Other major markets in Asia were all weak, as Japan’s Nikkei fell less than 0.1 per cent, Australia’s benchmark slipped 0.3 per cent and South Korea’s Kospi shed 0.3 per cent. Sentiment was cautious, as traders were waiting for the US job report due on Friday that will offer more insight on the path to interest-rate increases by the Federal Reserve.