Hong Kong stocks retreat as Ping An, Sinopec, tech firms expose weak earnings season amid China slowdown

Hang Seng Index fell 0.4 per cent to near a four-week low as third-quarter corporate earnings limped, Li Ning plunged on stock sale plan

Benchmark indices on the Shanghai and Shenzhen exchanges sank by more than 1 per cent as Sinopec to Ping An Insurance’s earnings disappointed

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Hong Kong’s benchmark Hang Seng Index on display at a street corner in Shanghai on 7 October 2021. Photo: EPA-EPE

Published: 10:54am, 28 Oct 2021Updated: 5:39pm, 28 Oct 2021

Hong Kong’s benchmark stock index tumbled on concerns about corporate earnings strength amid a slowdown in the Chinese economy, as Ping An Insurance and Sinopec pointed to a poor outlook for the earnings season. Li Ning slumped on a stock sale plan.

The Hang Seng Index fell by 0.3 per cent to 25,555.73 at the close of Thursday trading, failing to hold on to earlier gains. The Hang Seng Tech Index was little changed following a 3.2 per cent sell-off on Wednesday.

Ping An slumped 2.4 per cent to HK$58.35 after reporting a 31 per cent slide in earnings last quarter as investment performance sagged. Bourse operator Hong Kong Exchanges & Clearing, which posted a 3 per cent drop in earnings, retreated 1.5 per cent to HK$467.60.

Stocks wobbled with investors unimpressed by the third-quarter report cards as more companies prepared to issue their earnings. Weak results so far have exceeded the 2.4 per cent average earnings drop predicted for the 60-member Hang Seng Index in a Bloomberg consensus. China’s economic growth slowed to 4.9 per cent last quarter as the property and manufacturing engines faltered.

China Petroleum & Chemical Corporation, or Sinopec, fell 0.3 per cent in Hong Kong and 3.5 per cent in Shanghai. China’s largest oil refiner said its interim pre-tax profit fell by a third to 721 million yuan (HK$876 million).

“The poor performance of quarterly results [including] the HKEX and Ping An Insurance’s earnings did not impress the market,” said Will Shum, portfolio management director in Hong Kong at iFast Financial. “Investors await for Chinese banks’ results for further proof” that the fundamentals are sound], he added.

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