Hong Kong stocks tumble on sluggish corporate earnings while HSBC struggles on Ping An pressure
- Analysts have been cutting their earnings on Asian companies, Goldman and BofA say; downward revisions have quickened since mid-March: Morgan Stanley
- HSBC shares struggled amid pressure by key investor Ping An Insurance to revamp and list its Asian business
The Hang Seng Index dropped 0.6 per cent to 19,959.94 at trading day close, slipping below the 20,000 level for the first time since March 28. The Tech Index retreated 0.2 per cent, while the Shanghai Composite weakened 0.8 per cent.
Alibaba Group lost 1.2 per cent to HK$86.90 while Tencent slid 1.2 per cent to HK$345. Macau casino operator Sands China slumped 1.2 per cent to HK$29.10. Sportswear maker Li Ning tumbled 3.6 per cent to HK$56.90 and developer Country Garden slipped 2.4 per cent to HK$2.06.
Gains of 3.4 per cent to 4.9 per cent in Alibaba Health, CSPC Pharmaceuticals and BYD helped shore up the city’s benchmark index.
Analysts have trimmed their earnings on Asian companies outside Japan by 1.7 per cent since the start of the quarter, mostly in tech-driven Taiwan and South Korea, according to Goldman Sachs, with Chinese companies suffering a 1 per cent cut. The negative trend has re-accelerated since mid-March, Morgan Stanley said.
Analysts trimmed 12-month forward earnings of companies in the Hang Seng China Enterprises Index by 9.5 per cent last week, according to Bank of America, on top of a 10 per cent cut in the preceding week. Onshore companies that missed 2022 earnings targets were three times higher than those that beat, the bank said.