Hong Kong stocks tumble anew as Hang Seng Index closes below 15,000 and funds flee before Fed policy meeting

Traders lightened positions before the weekend as earnings from big Hang Seng Index members offered mixed outlook, with Fed rate-hike back in focus

BYD, CTG Duty Free and China’s top three lenders are among companies due to report third-quarter earnings later today

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People are silhouetted as they walk past an electric stock quotation board outside a brokerage in Tokyo on October 18, 2022. Photo: Reuters

Published: 10:29am, 28 Oct 2022Updated: 5:23pm, 28 Oct 2022

Hong Kong stocks tumbled anew as the city’s benchmark index finished below the 15,000-point mark for the first time in 13 years. Foreign funds fled amid mixed earnings reports from market heavyweights and before another Federal Reserve rate meeting next week.

The Hang Seng Index slumped 3.7 per cent to 14,863.06 at the end of trading, the lowest close since 2009. The loss this week amounted to 8.3 per cent. The Hang Seng Tech Index slumped 5.6 per cent on Friday, while the Shanghai Composite Index retreated 2.3 per cent.

Tencent Holdings retreated 5.8 per cent to HK$200.80 and Alibaba Group Holding tumbled 4.8 per cent to HK$61.75. Dairy producer China Mengniu sank 9.9 per cent to HK$25.15 after its rival Inner Mongolia Yili suffered a 26 per cent drop in earnings. Developer Longfor Group plunged 11 per cent to HK$13.12 and carmaker BYD sank 9.9 per cent to HK$165.70 before the quarterly result.

Investors turned cautious with markets baking in a likely 75-basis point hike by the Federal Reserve when US policymakers meet next week. Global funds were net sellers of 12.7 billion yuan (US$1.8 billion) worth of Chinese onshore stocks this week via the Stock Connect scheme, as the nation’s currency slumped.

“The market will remain volatile in the short term, given the foreign capital outflow,” said Song Yiwei, an analyst at Bohai Securities. “The mood is a bit cautious before the Fed meeting. However, the risk premium has already risen to a level that warrants higher allocation for stocks.”

China Life Insurance weakened 2.6 per cent to HK$8.80 after profit in the nine months to September 30 fell 36 per cent from a year earlier on smaller gains in its investment portfolio. Oil explorer CNOOC lost 0.3 per cent to HK$9.77, erasing an earlier gain after earnings jumped 89 per cent last quarter on higher crude prices.