Alibaba, JD.com lead tech rout in Hong Kong on inflation jitters while China hardens zero-Covid stance

Name: Shanghai residents under Covid lockdown protest against lack of food
Uploaded: 2022-05-06T02:09:13.000Z
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Description: Shanghai residents under Covid lockdown protest against lack of food

The Hang Seng Index slid 3.8 per cent at the close of Friday trading, while the Tech Index tumbled 5.2 per cent in the biggest sell-off in four weeks.

‘This is a major bear market’ as the US, Europe and Chinese economies face mounting growth risks, ACY Securities says

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People passing by a screen showing the Hang Seng Index in Central, Hong Kong on April 15. Photo: K. Y. Cheng

Cheryl HengandAnn Cao

Published: 10:09am, 6 May 2022Updated: 4:59pm, 6 May 2022

Hong Kong stocks slumped by the most in more than seven weeks as the threat of global inflation and speedy interest-rate increases prompted traders to dump riskier assets, with US equities suffering US$2.4 trillion rout overnight.

The Hang Seng Index slid 3.8 per cent to 20,001.96 at the close of Friday trading, the most since the March 15 crash. The Tech Index tumbled 5.2 per cent in the biggest sell-off in four weeks. The Shanghai Composite Index and Shenzhen Component Index both declined by more than 1.7 per cent amid dimming growth outlook.

Alibaba Group Holding, the owner of this newspaper, slumped by 6.6 per cent to HK$90.35. Meituan sank 4.7 per cent to HK$157 and Tencent retreated 4.7 per cent to HK$349.20. JD.com plunged 6.2 per cent to HK$226.60. Country Garden lost 9.5 per cent to HK$4.86, leading a broader 3.6 per cent slide in the Hang Seng Properties Index.

Today’s slide extended the losses in the Hang Seng Index to 14 per cent this year, wiping out more than US$327 billion of market value. Another US$3 trillion has been erased from the Shanghai and Shenzhen bourses through May 5, amid mounting economic toll from lockdowns under China’s zero-Covid policy.

“This is a major bear market,” said Clifford Bennett, chief economist at ACY Securities in Sydney. “The US economy is in diabolical shape, Europe is at war. And Shanghai, the world’s biggest port, is in extended lockdown. This is truly catastrophic.”

The S&P 500 Index sank 3.6 per cent to erase US$1.3 trillion of market value. It was only the fifth time the market has sold off more than 3.5 per cent since the depth of the Covid-19 pandemic in March 2020, according to Bloomberg data. The Nasdaq Composite Index plunged 5 per cent, lopping US$1.1 trillion of value.

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Shanghai residents under Covid lockdown protest against lack of food