Hong Kong technology and software stocks clobbered as US equity market rout continues
Tencent drops 3.27 per cent and Xiaomi falls 5.78 per cent, while carmakers recoup some losses
Hong Kong stocks continued to slide on Tuesday, with technology and software shares taking a beating in the wake of a market tumult in the US that saw prices tumbling at companies including Twitter, Facebook, Netflix and Intel.
The Hang Seng Index slipped 0.5 per cent, or 150.12 points, to 28,583.01, and the China Enterprises Index was down 0.2 per cent, or 21.59 points, to 11,024.73.
Meanwhile, in mainland China, the Shanghai Composite Index rose 0.3 per cent, or 7.35 points, to 2,876.40, while the CSI 300 - which tracks large companies listed in Shanghai and Shenzhen - was little changed at 3,517.66.
“People are waiting to see what is happening with the (US-China) trade war,” said Louis Tse Ming-kwong, managing director of VC Asset Management, adding that mainland Chinese investors are focused on A-shares rather than stocks traded on the Hong Kong exchange. “Investors want to focus on A-shares. They are more concentrated on their own stocks at the moment.”
In Hong Kong, Chinese internet giant Tencent fell 3.3 per cent to HK$355.20, as disappointing earnings from such US tech leaders as Intel and Twitter continued to impact the Hong Kong market.
Tencent will announce its second-quarter results on August 15.
Other software and tech stocks trading in Hong Kong also slid. Kingdee International, the biggest enterprise application and cloud services provider to small businesses in mainland China, dropped nearly 8 per cent to HK$8.69. Meanwhile, smartphone-maker Xiaomi’s shares fell 5.8 per cent to HK$17.60.
Sunny Optical, mainland China’s largest manufacturer of smartphone camera modules and lenses, was down 4.8 per cent to HK$129.50, while Apple supplier AAC Technologies Holdings lost 0.4 per cent to HK$100. This month, China’s manufacturing sector grew at its slowest pace in more than a year, according to figures published by China’s National Bureau of Statistics, as orders decreased and factories shed employees.
In other sectors, Samsonite’s shares fell 5.1 per cent to HK$29.70, as financial services group Nomura cut its target price for the world’s largest luggage maker to HK$36.7 from HK$41.9 on Tuesday.
Mainland Chinese automobile companies, however, had a bit of a rebound. Geely Automobile Holdings rose 0.1 per cent to HK$17.90, regaining some of its 2.9 per cent fall the day after a downgrade by Morgan Stanley over concerns that rising competition in the industry would weigh on the carmaker’s future profits.
Brilliance Auto, which has a venture with BMW, ended up almost 1 per cent to HK$10.24, clawing its way back from a 5 per cent decline a day earlier that saw its shares hit a 12-month low. The company said it would raise the prices of two US-made SUV models sold in mainland China by 4 per cent to 7 per cent to offset the impact of new US tariffs on cars, Brilliance said in a Sunday statement to Reuters. Beijing imposed an additional 25 per cent retaliatory tariffs on US car imports on July 6.