Hong Kong stocks fall for first time this week as concerns linger over China’s tech scrutiny
- The Hang Seng Index fell 0.7 per cent on Friday, trimming its weekly gains to 1.9 per cent
- CICC and Chinese brokerages rally after Xi announces creation of Beijing Stock Exchange
Hong Kong stocks dropped for the first time this week on Friday, with a gauge of Chinese technology companies retreating from a three-week high, on concerns that a recent run-up was not consistent with mainland China’s tough regulatory landscape.
Analysts were split over whether technology stocks had troughed after a six-month rout that wiped out more than US$1 trillion in market capitalisation. China International Capital Corporation (CICC) viewed the recent uptick as a false rebound, while UBS Group said that the market might have already bottomed out.
“Dip buyers in China equities will keep dipping their toes,” said Jeffrey Halley, an analyst at Oanda. “However, I believe we are a long way still from repricing China equities to a level that balances the government‘s enthusiasm for common prosperity,” he added, referring to Beijing’s quest to narrow China’s wealth gap.
Among other Chinese technology stocks trading in Hong Kong, search engine provider Baidu, gaming giant NetEase and Tencent Holdings all fell at least 1.6 per cent.
Shenwan Hongyuan Group surged by 9.7 per cent to 5.34 yuan in Shanghai and First Capital Securities jumped 6.6 per cent to 7.80 yuan in Shenzhen. CICC advanced 1.9 per cent to 57.25 yuan in Shanghai and its Hong Kong-traded stocks gained 3.2 per cent to HK$20.75 on Friday.