Hong Kong stocks complete 2nd weekly loss on fund outflows as mixed recovery signals, risk of US tech curbs sap demand

Name: Chinese balloon row: Joe Biden says US-China relations have not taken a big hit
Uploaded: 2023-02-10T02:47:02.000Z
Duration: 2 min 34 s
Description: Chinese balloon row: Joe Biden says US-China relations have not taken a big hit

The Hang Seng Index logged a second weekly loss, as mixed recovery signals in China clouded earnings outlook

The US is said to be mulling new rules to prevent US investment in Chinese tech companies, The New York Times reported, days after the ‘spy balloon’ incident

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Pedestrians walk past a giant sceen showing financial data in Shanghai on January 30. Photo: Bloomberg

Jiaxing Li

Published: 10:47am, 10 Feb 2023Updated: 4:58pm, 10 Feb 2023

Hong Kong stocks retreated for a second straight week as investors sold amid mixed signs of recovery in China, while rising geopolitical tensions stoked concerns about new tech sanctions on Chinese companies.

The Hang Seng Index fell 2 per cent to 21,190.41 at the close of Friday trading, bringing the drop this week to 2.2 per cent. The Tech Index sank 4.6 per cent, while the Shanghai Composite Index weakened 0.2 per cent.

Alibaba Group slipped 3.3 per cent to HK$104.10, Baidu slumped 7.4 per cent to HK$140.40 while JD.com tumbled 6.3 per cent to HK$210.40. BYD lost 3.5 per cent to HK$240.60 as Warren Buffett’s Berkshire Hathaway further cut its stake. China’s biggest chip maker SMIC slipped 4.3 per cent to HK$17.24 on an earnings setback.

Mainland Chinese investors were net sellers of HK$3.2 billion (US$407.6 million) worth of Hong Kong-listed stocks this year, according to Stock Connect data.

Equities in Hong Kong struggled as a rally from late October lost momentum after the Lunar New Year holiday. The Hang Seng Index has now completed a second losing week, taking the pullback to 7 per cent since the benchmark peaked on January 27.

“Investor sentiment edged down” due to mixed economic data and geopolitical uncertainties, Morgan Stanley analyst Laura Wang said in a note on Thursday. China’s recovery remains on track, although “some interim volatilities” should be expected, she added.

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Chinese balloon row: Joe Biden says US-China relations have not taken a big hit