Hong Kong stocks tumble from 2-month high on China’s economic, earnings setbacks
Electric-vehicle makers led losses on concerns fresh price cuts by BYD would prolong a price war, pressuring margins and earnings
The Hang Seng Index dropped 1.4 per cent to 23,282.33 on Monday, while the Hang Seng Tech Index slid 1.7 per cent. On the mainland, the CSI 300 Index slipped 0.6 per cent and the Shanghai Composite Index declined 0.1 per cent.
Chinese electric-vehicle (EV) maker BYD slumped 8.6 per cent to HK$425.20 from an all-time high after local media outlets reported that it would cut prices on 22 models to clear inventory and promote sales. Peers tumbled amid concerns over a prolonged price war would further erode margins. Geely Auto sank 9.5 per cent to HK$18.38 and Li Auto lost 3.2 per cent to HK$109.90.
Meituan retreated 5.5 per cent to HK$129.40 before its quarterly earnings report after trading hours on Monday. Alibaba Group Holding slipped 1.6 per cent to HK$116.90 and Tencent Holdings fell 1.5 per cent to HK$510. EV battery king CATL slumped 2.6 per cent to HK$314.
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“China’s economic data may still face pressure from the impact of the US tariffs in the short term and investors can choose to take some profits,” said Amber Zhou, an analyst at Haitong International. “The markets may trade sideways in the next three to six months.”