Alibaba, JD.com slide with Hong Kong stocks as China Covid lockdowns spark protests, hit large chunk of economic capacity
- Unrest stoked by China’s strict zero-Covid policy sends the Hang Seng Index tumbling to a two-week low amid heightened risk to economy
- Goldman estimates cities with high-risk districts account for 65 per cent of GDP, odds of early reopening may include ‘forced and disorderly exit’
The Hang Seng Index sank 1.6 per cent to 17,297.94 at the close of Monday trading, the lowest level since November 10. The Hang Seng Tech Index slid 1.9 per cent and the Shanghai Composite Index retreated 0.8 per cent.
Alibaba Group Holding tumbled 3.4 per cent to HK$72.20 and Tencent Holdings dropped 1.1 per cent to HK$270 while JD.com crashed 4.3 per cent to HK$190.10. A gauge of mainland-traded consumer stocks declined by 0.4 per cent as market leader Kweichow Moutai slipped 0.8 per cent to 1,509.88 yuan.
Limiting losses, Macau casino stocks gained after the city’s six existing operators won new 10-year concessions. Sands China surged 8.4 per cent to HK$18.80 while Galaxy Entertainment climbed 0.5 per cent to HK$43.05. Meituan added 2.1 per cent to HK$139.40 after third-quarter profit exceeded estimates.
China reported 40,052 daily new cases on Sunday, topping 40,000 for the first time, according to the health ministry. Shanghai will tighten restrictions from Tuesday, requiring negative testing results within 48 hours, instead of 72, before residents are allowed to enter shopping centres and restaurants.
As cases surged, cities with high-risk districts now accounted for some 65 per cent of national output, Goldman Sachs estimated.