Hong Kong stocks sink, trimming week’s trade-deal gain, on Alibaba earnings miss
Lacklustre earnings could derail a rebound in equities spurred by a temporary ceasefire in the tariff war between China and the US
The Hang Seng Index fell 0.5 per cent to 23,345.05 at the close on Friday, paring the week’s gain to 2.1 per cent. The Hang Seng Tech Index lost 0.3 per cent. On the mainland, the CSI 300 Index slid 0.5 per cent and the Shanghai Composite Index retreated 0.4 per cent.
Alibaba, owner of the Post, tumbled 4.3 per cent to HK$123.40 after both its revenue and profit came in short of analysts’ expectations. E-commerce rival JD.com retreated 2.7 per cent to HK$131.80. Other tech stocks also fell: Meituan sank 3 per cent to HK$131.40 and Kuaishou Technology shed 2.1 per cent to HK$50.85.
Lacklustre earnings could derail a rebound that was spurred by a temporary ceasefire in the tariff war between China and the US. With the buzz on the trade front fading, investors have shifted focus to corporate earnings and macroeconomic data. Earlier this week, Tencent Holdings posted mixed results, with quarterly earnings missing estimates.
“We maintain the view that the market will move in a consolidation pattern in the second quarter,” said Fu Jingtao, a strategist at Shenwan Hongyuan Group in Shanghai. “Some of the old concerns are still there. Expectations about a sustained improvement in the fundamentals have yet to emerge and there’s also no big change in expectations for corporate earnings.”
Alibaba’s revenue rose 7 per cent from a year earlier to 236.5 billion yuan (US$32.6 billion) in the last quarter of its financial year that ended in March, missing a Bloomberg consensus estimate of 237.9 billion yuan. Net income surged 279 per cent to 12.4 billion yuan, falling short of the 22.6 billion yuan that was expected by analysts.