Hong Kong stocks extend losing streak as traders dump holdings on reports US to sanction Chinese biotech, cloud-computing firms
- Hang Seng ended on weaker footing as news about new US sanctions prompted traders to dump biotech firms
- Beijing think tank calls for stronger stimulus to support growth as new home prices slipped in November by the most in nearly seven years, while retail sales struggled
The Hang Seng Index slipped 0.9 per cent to 23,420.76 at the close of Wednesday trading, reversing an earlier gain of as much as 0.5 per cent. The Tech Index slumped 1.6 per cent, while China’s Shanghai Composite Index declined 0.4 per cent.
WuXi Biologics crashed 19.2 per cent to HK$79.10, the largest one-day drop on record, while Sino Biopharmaceutical tumbled 5 per cent and Innovent Bio lost 9.9 per cent. Tencent and Meituan lost 0.9 per cent and 1.8 per cent respectively, pacing tech losses.
Gains evaporated after the FT said the Treasury Department would sanction eight tech and cloud-computing companies, while the Commerce Department separately would be adding more than two dozen, including unnamed biotechnology companies, to its entity list.
“China should present renewed challenges as they seek to transform their economic model while at the same time the US turns its attention to containing the world’s second-largest economy,” Michaël Lok, group chief investment officer at Swiss private bank Union Bancaire Privee, said in its latest 2022 outlook report.