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A pedestrian looks at an electronic screen displaying stock prices and the Hang Seng Index in Mong Kok, Hong Kong. Photo: Winson Wong

Hong Kong stocks hit 13-year low as Alibaba, Tencent pressure index near 16,000-mark, yuan slumps on China growth worries, Fed rate outlook

  • The Hang Seng Index slumps to the lowest level since April 2009 as tech losses put the 16,000 threshold under pressure
  • The offshore yuan depreciates to the weakest level since August 2010 on slowdown concerns, Fed tightening bias
Hong Kong stocks slumped to the lowest level in more than 13 years while the offshore yuan weakened to a multi-year low amid growing concerns about China’s economic slowdown and faster rate increases in the US.

The Hang Seng Index slipped 1.4 per cent to 16,280.22 at the close of Thursday trading, a level not seen since April 2009. The Tech index fell 2.4 per cent while the Shanghai Composite closed 0.3 per cent lower. An index tracking US-listed Chinese stocks plunged overnight to a nine-year low.

Alibaba Group Holding tumbled 4.1 per cent to HK$69.75, Tencent Holdings lost 4.7 per cent to HK$232.60, JD.com weakened 4 per cent to HK$161.60 and Baidu tanked 8.5 per cent to HK$91.10. Electric-car producers Xpeng, Nio and Li Auto slid by 3.8 per cent to 5.2 per cent, after Tesla’s sales missed consensus estimates.

“It’s a panic sell we haven’t seen in years,” said Dickie Wong, executive director of research at Kingston Securities in Hong Kong. The depreciating yuan and delayed economy data in China are also spooking traders, he said.

The benchmark index has dropped 5.5 per cent in October, heading for a fourth successive month of decline. The rout has erased over HK$125 billion (US$15.9 billion) from the city’s stock market so far this month, and HK$1.6 trillion since the start of the year.

Offshore Chinese yuan recently traded at 7.255 per US dollar, near the lowest point since August 2010, according to Bloomberg data. The dollar has strengthened on the back of aggressive policy tightening by the Federal Reserve, with the central bank poised to raise its target interest rate again early next month to cool inflation.

John Lee sets targets to enhance Hong Kong hub amid challenge from Singapore

A sell-off in Hong Kong developers continued, as New World Development retreated 0.6 per cent to HK$18.70 and Longfor Group lost 2.3 per cent to HK$18.36. The market was disappointed by the lack of oomph in measures unveiled by Chief Executive John Lee Ka-chiu in his policy address on Wednesday, Wong said.

Fosun International gained 0.2 per cent to HK$4.84 as the stock resumed trading. The owner of Club Med is selling its 60 per cent stake in an iron and steel producer in mainland China for no less than 16 billion yuan (US$2.2 billion), according to an exchange filing.

Elsewhere, China’s biggest commercial banks maintained their benchmark loan and mortgage reference rates in their monthly setting, keeping borrowing costs low to support the economy. The one-year loan prime rate (LPR) remained at 3.65 per cent, while the five-year rate was unchanged at 4.3 per cent, the central bank said.

06:40

Breaking down Hong Kong chief executive John Lee's policy address

Breaking down Hong Kong chief executive John Lee's policy address

China’s economic data dump this week, which was expected to include the third-quarter GDP report, retail sales and export performance, has been delayed without a reason, while the Communist Party continues with its 20th National Congress in Beijing.

Asian stocks also weakened, tracking global peers. The benchmark indices in Japan, South Korea and Australia all dropped by 0.9 to 1 per cent.

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