Chinese tech stocks sink as Alibaba hits record-low in Hong Kong amid price cuts, Fed concerns while city battles Covid-19 outbreaks

More than 20 analysts have trimmed their price targets for Alibaba Group over the past month, including at least three this week, according to Bloomberg data

Goldman Sachs cut Alibaba Health to neutral from buy as stock lost more than 9 per cent this year

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A screen shows a benchmark US stock index level on January 26 following the Fed decision. Photo: Reuters

Published: 10:42am, 27 Jan 2022Updated: 4:56pm, 27 Jan 2022

Hong Kong stocks sank by the most in two months led by another round of sell-off in Alibaba Group Holding as more analysts trimmed their price targets before its earnings. The Federal Reserve reiterated its hawkish stance, signalling the first rate increase in March.

The Hang Seng Index retreated 2 per cent to 23,664.80 at the close of Thursday trading after slumping as much as 3 per cent in the worst day since September 20. The Tech Index tumbled 3.8 per cent, the most in three weeks, while China’s Shanghai Composite Index lost 1.8 per cent.

Alibaba, the owner of this newspaper, plunged 7.2 per cent to an all-time low of HK$108.50. Meituan retreated 6.9 per cent while both NetEase and JD.com lost at least 3.5 per cent. Tencent fell 2.2 per cent.

More than 20 analysts have trimmed their price targets for Alibaba’s US or Hong Kong-listed shares over the past month, including at least three this week, according to Bloomberg data. The firm may report its third-quarter results as early as next week, according to precedent.

Alibaba Healthcare Information slipped 4.3 per cent to HK$5.99 after Goldman Sachs downgraded the stock to neutral from buy on Thursday, with a price target of HK$8. The stock has lost 9.1 per cent this year.

Higher borrowing costs “are likely to continue to pressure highly valued part of the equity market,” Kelly Craig, global market strategist at JPMorgan Asset Management, said after the Fed decision. “Yields should rise, but growth worries may keep investors cautious in the near term.”

An early market rally on Wall Street gave way to a broad slide for stocks and a surge in bond yields Wednesday after the Federal Reserve signalled plans to begin raising interest rates soon. Photo: AP

The Federal Reserve plans to raise interest rates soon to fight inflation, roiling US stocks and cryptocurrencies this month. It expects to start bond-tapering after lift-off to fight US inflation at 39-year high, it added.