Tencent, Alibaba push Hang Seng into weekly loss as US sanctions more Chinese firms over Xinjiang issues

Name: China claims improved living standards and ethnic equality in Xinjiang while ignoring allegations
Uploaded: 2021-12-17T02:52:06.000Z
Duration: 1 min 50 s
Description: China claims improved living standards and ethnic equality in Xinjiang while ignoring allegations

Hang Seng Index lost 3.4 per cent this week as market struggled for traction on either rate-cut bets or risk from further US sanctions

Tech stocks weighed on overall sentiment as benchmark slumped to near record low, challenging recent bullish views even as valuations cheapened

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Electronic billboards displaying stock transactions outside the Exchange Square in Central, Hong Kong on November 30. Photo: EPA-EFE

Cheryl Heng

Published: 10:52am, 17 Dec 2021Updated: 5:15pm, 17 Dec 2021

Hong Kong stocks slipped, completing a weekly loss, after the US sanctioned more Chinese tech companies and added others to a blacklist for alleged human rights abuses in the far-west Xinjiang region.

The Hang Seng Index declined 1.2 per cent to 23,204.64 at the close of Friday trading. The benchmark weakened 3.4 per cent, its fourth week of pullback in five. The Tech Index sank 2.4 per cent to close near an all-time low. China’s Shanghai Composite Index lost 1.2 per cent.

Tencent and Alibaba Group Holding lost more than 3.1 per cent, while Meituan retreated 5.3 per cent. Xinyi Solar, which produces solar panels in Xinjiang, sank 9.4 per cent while Xinyi Glass tumbled 6 per cent.

On the bright side, HSBC climbed 2.8 per cent while Standard Chartered jumped 2.3 per cent after a surprise rate increase by the Bank of England, a move that could improve interest margins on their lending in home markets.

The US Treasury Department sanctioned eight companies, including drone maker DJI Technology and artificial intelligence giant Megvii. The Commerce Department separately added 34 firms to its so-called entity list. The move was earlier reported by the Financial Times. China has previously rejected those accusations.

“US-China relations will continue to be tense, which will pressure stocks on the sanction list,” said Louis Wong Wai-kit, a director at Phillip Capital Management. “This added jitters to the market.”

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China claims improved living standards and ethnic equality in Xinjiang while ignoring allegations

This week’s losses challenged recent upbeat views on Chinese stocks from global money managers, who have been persuaded by the cheapest valuations in years and the prospects of policy easing and softening regulatory crackdown.