BYD, Xiaomi drag Hong Kong stocks to 2023 low as traders await China policy tonic while Weibo, Xpeng gain from index review

Investors are preparing for possible policy tonic from the ‘two sessions’ as the China reopening bets lost momentum over the past four weeks

Xpeng and Weibo advanced before their inclusion in key market indices from next month following a Hang Seng review

Reading Time:2 minutes

View of an electronic board displaying stock index and prices inside a securities brokeragae in Beijing. Photo: EPA-EFE

Published: 11:01am, 27 Feb 2023Updated: 4:57pm, 27 Feb 2023

Hong Kong stocks retreated as traders await policy stimulus signals from China’s most important political gatherings later this week while Xpeng and Weibo advanced pending their index inclusion next month. Higher US rate outlook weighed on sentiment.

The Hang Seng Index fell 0.3 per cent to 19,943.51 on Monday, the lowest closing level this year following a four-week losing streak. The Tech Index dropped 0.5 per cent while the Shanghai Composite Index lost 0.3 per cent.

Carmaker BYD tumbled 3 per cent to HK$216.20, Xiaomi slid 0.8 per cent to HK$11.90, while Galaxy Entertainment led losses among Macau casino operators with a 2.1 per cent slide to HK$52.15. Alibaba Group dropped 0.8 per cent to HK$89.30 while JD.com lost 0.6 per cent to HK$177.30.

The National People’s Congress and the Chinese People’s Political Consultative Conference will hold their annual meetings – known as the “two sessions” – in Beijing from March 4 with analysts and money managers pinning their hopes on more policy stimulus as the China reopening play lost momentum this month.

“Investors are now still hesitant about the sustainability and speed of economic recovery,” Li Xukun, a fund manager at CICC said, in a note on Sunday. The market generally does not expect any support to be very aggressive, he added.

The Hang Seng Index has slumped for four straight weeks into a technical correction of more than 10 per cent from its recent peak on January 27. More than US$452 billion of market capitalisation has been erased from the city’s stock market in the process.