Alibaba leads Hong Kong stock retreat, Tencent sinks to 4-year low before Fed rate decision as HSBC warns of prolonged property crisis in China
- Stock traders dialled back risk appetite on concerns the Fed and other central banks are not ready to declare a victory over persistent inflation
- HSBC boss has warned of a prolonged slump in China’s commercial property market even amid measures to stabilise prices
The Hang Seng Index dropped 1.8 per cent to 18,444.62 at the close of Wednesday trading, near the lowest level in six months. The benchmark index has lost 7.1 per cent this month, bringing the setback this year to 21 per cent. The Tech Index slid 3 per cent, while the Shanghai Composite Index declined 0.2 per cent.
Alibaba Group sank 3.7 per cent to HK$83.05, approaching the lowest price since late May, while Tencent slumped 2.5 per cent to a four-year low of HK$286 and BYD retreated 2.2 per cent to HK$217.20. Country Garden, the top property developer by sales, lost 3.9 per cent to HK$2.19, while rival China Vanke slipped 1.2 per cent to HK$15.30.
“Central banks are responding with aggressive rate hikes without fully acknowledging the growth damage required,” strategists including Wei Li wrote in the report. “ We have argued inflation will be persistent and see the Fed hiking through the year-end. We stick with our dialed-down risk stance.”
Four out of five stocks that debuted on Wednesday dropped. InnoCare Pharma lost 15.8 per cent to 9.28 yuan in Shanghai, while Nanjing CIGU Technology retreated 13 per cent to 28.70 yuan. In Shenzhen, Lepu Medical Technology Beijing lost 0.8 per cent to 19.45 yuan and J. Pond Precision Technology dropped 10 per cent to 46.50 yuan. Enwei Pharmaceutical gained 52 per cent to 45.40 yuan.
Asian markets followed overnight losses on Wall Street. Stocks in Japan declined 1.4 per cent and those in Korea dropped 0.9 per cent while Australian equities slid 1.6 per cent.