Hong Kong stocks surrender gains with market logging third weekly slump amid losses in Alibaba, Tencent and BYD

Hang Seng Index extended week’s loss to 5.9 per cent, adding to successive weekly slide in the new year as global funds avoided Chinese stocks

Investors are wary of China’s growth outlook as policymakers continue to refrain from injecting big stimulus to appease markets

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An electronic screen showing the Hang Seng indices in Central, Hong Kong on December 11, 2023. Photo: Edmond So

Zhang Shidongin ShanghaiandJiaxing Liin Hong Kong

Published: 10:32am, 19 Jan 2024Updated: 4:48pm, 19 Jan 2024

Hong Kong stocks registered a third straight week of losses, the market’s worst start to a year since 2016, as investors continue to fret over China’s economic outlook. The slump deepened even as some valuation measures reached near all-time lows.

The Hang Seng Index lost 0.5 per cent to 15,308.69 on Friday to near the lowest since October 2022, taking the cumulative decline this week to 5.9 per cent. The index erased an earlier rally of as much as 1 per cent. The Tech Index lost 1.5 per cent and the Shanghai Composite Index slipped 0.5 per cent to the lowest level since May 2020.

Tencent retreated 2.3 per cent to HK$271.20, Alibaba slipped 1.7 per cent to HK$65.55 and peer JD.com tumbled 2.5 per cent to HK$84.15. EV maker BYD weakened 0.4 per cent to HK$195.60 while rival Li Auto tumbled 2.7 per cent to HK$110.20. Hansoh Pharma slid 3.9 per cent to HK$12.36 and Wuxi Biologics dropped 2.6 per cent to HK$28.35.

This week’s loss is the most in nearly 10 months and a third consecutive weekly decline in the new year. “Chronic disappointment” over China’s stimulus and policy easing measures have kept foreign investors at bay, with many cutting their allocation to the lowest net underweight in more than a year.

China’s central bank this week kept its key lending rates unchanged for a fifth month, while government reports showed growth trailed forecasts last quarter and home prices fell again in December by the most since 2015.

“The past week has been very painful,” said Eva Lee, head of Greater China Equities at UBS Global Wealth Management. “We will stay on the defensive side” until there’s more policy visibility from the National People’s Congress in March, she added.