Alibaba sinks to record low while mainland China funds flee from tech sell-off in Hong Kong
- Alibaba slumped to an all-time low and Meituan plunged before its earnings report later this week as stock bulls paid the price for mistimed optimism
- More than US$160 billion has been erased from Chinese tech stocks traded in Hong Kong and New York over the past week
The Hang Seng Index lost 1.2 per cent to 24,651.58 at the close of Tuesday trading, the lowest level since October 6. The Hang Seng Tech Index retreated 1.4 per cent, while the Shanghai Composite Index climbed 0.2 per cent.
Mainland investors, who contribute to more than a fifth of daily transactions, have taken their money off the table. They have sold HK$9.3 billion (US$1.2 billion) worth of Hong Kong stocks so far this month via the Stock Connect link. If sustained, that would be the first monthly outflows since August, according to exchange data.
“To reverse the downtrend, we need to see signs of bottoming in regulatory crackdowns and China’s economic slowdown, as well as an easing in global inflation,” said Wei Wei, an analyst at Ping An Securities. “We have had none of these elements at the moment.”
Tech companies are under pressure to deliver after big earnings misses by Alibaba Group Holding and Bilibili. Alibaba, the owner of this newspaper, and food-delivery giant Meituan both sank 3 per cent.