Hong Kong stocks suffer worst quarter in 11 years as investors dump Alibaba, Tencent, HSBC on global recession fears
- The Hang Seng Index slumped 21 per cent this quarter for the biggest decline since the same three months in 2011
- Top losers in September included Alibaba and Tencent as they slumped at least 17 per cent; HSBC sank 15 per cent and Country Garden crashed 22 per cent
The Hang Seng Index closed at 17,222.83 on Friday, for a 21 per cent loss since June 30. That is the most since a 21.5 per cent sell-off in the same quarter in 2011. This month’s 14 per cent plunge is also the worst in 11 years. The Hang Seng Tech Index slid 0.9 per cent, while the Shanghai Composite Index lost 0.6 per cent.
An early bounce on Friday, aided by better than expected Chinese manufacturing data and measures to support the housing industry, lost some steam as worries about further interest-rate increases sapped appetite for risk taking.
Chinese tech stocks, which drive the local market, took a major beating this quarter. Alibaba Group tumbled 30 per cent and Tencent lost 25 per cent while Meituan slumped 15 per cent. Developer Country Garden sank 22 per cent this month, even after a 9 per cent rally on Friday, while HSBC tumbled 15 per cent.
Trading thinned before the National Day break in mainland China next week. Volume in Hong Kong was about a fifth below the 30-day average, while those on the Shanghai bourse was almost 10 per cent poorer, according to Bloomberg data. Trading in Hong Kong will separately pause on October 4 for a local holiday.
“The sentiment is worsening as the market is wary of the risks from overseas markets during the holiday,” said Li Lifeng, a strategist at Huaxi Securities in Shanghai. Interest-rate increases and a slumping US market are two big factors weighing on investor confidence, he added.
Better-than-expected China economic data tempered losses in onshore stocks. An index tracking Chinese manufacturing expanded to 50.1 in September, the statistics bureau said on Friday. The reading was better than the consensus for a contraction to 49.7 among economists tracked by Bloomberg. It shrank in July and August.
Three companies started trading in Shenzhen. Inner Mongolia OJing Science & Technology, which makes quartz products, surged by the 44 per cent daily limit to 22.54 yuan and Zhejiang Bofay Electric also jumped by that much to 28.47 yuan. Guangzhou Frontop Digital Creative Technology advanced 15 per cent to 28.99 yuan.
Other key benchmarks all declined in Asia on Friday. Japan’s Nikkei 225 slumped 1.8 per cent, Taiwan’s Taiex lost 0.8 per cent and Australia’s S&P/ASX 200 dropped 1.2 per cent. That followed a turbulent overnight trading in the US where concerns about an economic recession deepened.
