Alibaba, JD.com, Baidu drag Hong Kong stocks to 1-week low on jitters about China’s economy, US rates
- Hong Kong stocks fell for a second straight day as sentiment took a hit because of fears over China’s economy and overnight decline on Wall Street
- The departure of a Chinese official overseeing the nation’s video gaming industry did little to lift investors’ spirits following a recent meltdown in gaming stocks
The Hang Seng Index fell 0.9 per cent to 16,646.41 at the close, a level last seen on December 27. The Hang Seng Tech Index dropped 1.8 per cent, while the Shanghai Composite Index slipped 0.2 per cent.
Alibaba Group Holding slid 1.9 per cent to HK$73.30. JD.com slumped 3.2 per cent to HK$106.30 and search engine operator Baidu eased 2.4 per cent to HK$112.50. The city’s subway operator MTR shed 4.2 per cent to HK$28.60 after Citigroup cut the rating on the stock to sell from buy. Smartphone maker Xiaomi lost 3.2 per cent to HK$14.98 and personal computer maker Lenovo Group sank 4.5 per cent to HK$10.54.
Both Hong Kong and Chinese stocks started the new year on a poor note, with benchmarks falling on the first trading day on Tuesday. Investors remained skittish after an official report showed China’s manufacturing shrank for a third consecutive month in December, indicating a lingering weakness in the economy, and declines in home sales of the top 100 developers deepened in the month.
“Overall sentiment was downbeat as investors continued to grapple with the uncertainties associated with a weak economic recovery, the property downturn and limited fiscal policy support,” said James Wang, a strategist at UBS Group in Hong Kong. “Most investors seemed to be focused on high dividend yield names, a strategy in which we see some merit in the very near term given the slowdown in some of the leading economic indicators.”
Sentiment took a hit after rallies in US tech stocks and bonds stumbled, with traders dialling back their bets on the Federal Reserve lowering borrowing costs any time soon. Investors are awaiting the minutes of the last Fed policy meeting and an array of jobs data due later in the week.