Hong Kong stocks end 3-day advance as China strengthens crackdown with insurers next in focus while Li Auto stumbles in debut

Ping An Insurance and ZhongAn P&C tumbled amid reports insurance platform operators are being targeted for a clean up in market practices

Chinese EV maker Li Auto fell in Hong Kong debut after raising HK$11.6 billion from stock offering

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Pedestrians seen outside the Exchange Square in Central, where the Hong Kong stock exchange is located. Photo: AFP

Published: 11:03am, 12 Aug 2021Updated: 5:19pm, 12 Aug 2021

Hong Kong stocks fell, halting a three-day advance after China signalled it would strengthen regulations to steady the economy and amid a report insurance technology platforms are being targeted. Chinese Tesla rival Li Auto failed to garner a premium on its first day of trading.

The Hang Seng Index fell 0.5 per cent to 26,517.82 at the close of Thursday trading. The Shanghai Composite fell 0.2 per cent, while the CSI 300 of the biggest stocks in Shanghai and Shenzhen declined 0.8 per cent.

The State Council, China’s cabinet, said it would work on legislation including national security, technological innovation and antitrust to strengthen the government, according to a statement on Wednesday. The banking and insurance regulators separately ordered companies and local agencies to curb improper marketing and pricing practices, Bloomberg and the Securities Journal reported.

Ping An Insurance fell 2.6 per cent to HK$68, while ZhongAn Online P&C Insurance slumped 11.5 per cent to HK$37.80. Hong Kong Exchanges and Clearing fell 3.5 per cent to HK$499.20 as the bourse operator’s first-half profits trailed estimates and amid concerns China’s clampdown will slow stock listing applications and related fees.

“In China, the evidence is now clear that we are seeing a policy shift and not a spasm of regulation,” Rabobank analyst Michael Every said in a report. “The key question for markets is if this is positive or negative for growth” at a time when the economy is grappling with a resurgence in Covid-19 infections, he added.