Hong Kong stocks slide on earnings drag as data to signal further contraction in Chinese manufacturing
- Report cards from PetroChina, BYD, Vanke and China Life Insurance underwhelmed the market as slowdown hit home
- A government report this weekend may signal another month of contraction in China’s manufacturing under the stress of power cuts
The Hang Seng Index dropped 2.8 per cent to 25,406.50 from a week ago, retreating from a seven-week high. The Hang Seng Tech Index lost 5.5 per cent in the week as Ping An Healthcare plunged by 15 per cent while Alibaba Healthcare Information hit a one-year low.
China Life lost 2.9 per cent to HK$13.60, among the benchmark index‘s largest decliners, after reporting a 54 per cent slide in earnings. BYD slid 1.3 per cent to HK$297.80 while China Vanke tumbled 5.3 per cent to HK$18.26. Zoomlion retreated 8.8 per cent to HK$5.62 as earnings slumped 46 per cent.
“Weak earnings were not unexpected given the economic slowdown, with an unfortunate combination of tighter regulations, power shortages and Covid-19 outbreaks,” said Stephanie Leung, deputy chief investment officer at wealth management firm StashAway HK. “However, the market is forward looking. We expect a recovery as these negative factors subside over the next few months.”
China’s economy grew 4.9 per cent last quarter, easing rapidly from 7.9 per cent and 18.3 per cent in the preceding two quarters following a power crunch, a pullback in the housing market and supply-chain bottlenecks.
Manufacturing in China probably contracted for a second month in October, with the official purchasing managers’ index little changed at 49.7 versus 49.6 in September, according to economists tracked by Bloomberg. The statistics office will report on Sunday.
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Major gauges in Asia-Pacific were mixed. The Japanese benchmark gained 0.3 per cent while equities in Australia and South Korea declined by 1.5 and 1.3 per cent respectively.
This week’s losses eroded gains during the month, following a bashing in the preceding four month. The Hang Seng Index gained 3.3 per cent, while the city’s tech index advanced 4.5 per cent.
The Shanghai Composite Index gained 0.8 per cent. Shenzhen Urban Transport Planning Centre tumbled 8 per cent to 33.59 yuan on the first day of trading in Shenzhen.
