Hong Kong stocks fall in month as Alibaba, BYD lead slide while Sa Sa surges on no-mask mandate

The Hang Seng Index fell this month into a technical correction as price wars at home and heightened geopolitical tensions curbed risk appetite

Hong Kong will scrap mask-wearing rules from Wednesday, ending a key part of social-distancing measures since the Covid-19 pandemic

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People wearing masks standing near a screen showing stock market indicators in Central, Hong Kong. Photo: Li Jiaxing

Published: 10:44am, 28 Feb 2023Updated: 5:12pm, 28 Feb 2023

Hong Kong stocks slumped in February, marking the first monthly loss since October amid growing competition among Chinese tech firms while geopolitical tensions undermined risk appetite. Cosmetics retailing chain Sa Sa International jumped after the city scrapped its mask-wearing rules.

The Hang Seng Index dropped 0.8 per cent to 19,785.94 at the close of Tuesday trading, the lowest level this year. The Tech Index dropped 1.6 per cent, while the Shanghai Composite Index added 0.7 per cent.

Alibaba dropped 3.2 per cent to HK$86.50 and JD.com slid 2.4 per cent to HK$173.70. BYD dropped 2 per cent to HK$211.20 on media reports it cut car prices to garner sales, while peer Geely Auto slumped 4.5 per cent to HK$10.24. Xinyi Solar tumbled 9.2 per cent to HK$8.38 after its 2022 earnings missed market expectations.

The Hang Seng Index slumped 9.3 per cent this month, erasing more than US$310 billion of capitalisation from the city’s broader market. The technical correction of more than 10 per cent since January 27 has also pushed the market into near-oversold levels.

“The key point here is that the ongoing difficulties in the market appear [to be] technical,” according to Alpine Macro, which predicted the rally from late October. “We are watching these market signals as the canaries of the coal mine if the sell-off degenerates into something more fundamental.”

Chinese companies like JD.com, Pinduoduo, Meituan, Xpeng and BYD have recently fought over e-commerce dominance, food delivery market share and competed for consumer dollars by slashing domestic car prices, threatening profit margins.

Elsewhere, Sa Sa International jumped as much as 6.4 per cent to HK$1.84 and closed 5.8 per cent higher at HK$1.83 to bring this year’s gain to 0.6 per cent. The stock appreciated about 9 per cent in 2022 as the pandemic subsided. The government’s decision to scrap the mask mandate may help boost cosmetics sales.