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HSBC, Alibaba, developers fall as Hong Kong stocks end painful week at 13-year low on China outlook, Fed rate pressure

  • The fallout from China’s zero-Covid policy and aggressive policy tightening in the US continue to weigh on the market
  • Volatility to persist despite high-quality names being available at attractive prices, Morningstar analyst says

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A screen showing the latest stock and currency data in Shanghai in September 2022. Photo: EPA-EFE
Jiaxing Li
Hong Kong stocks completed a second weekly loss as traders remained pessimistic about the impact of zero-Covid policy on China’s economy, while markets reeled under pressure from the latest troubles in the UK and the Federal Reserve’s rate hikes.
The Hang Seng Index fell 0.4 per cent to 16,211.12 on Friday while the Tech Index lost 0.6 per cent and the Shanghai Composite Index gained 0.1 per cent. The benchmark index declined 2.2 per cent for the week, hitting the lowest level since April 2009 and bringing this year’s setback to 31 per cent.

In Friday’s moves, Alibaba retreated 1.3 per cent to HK$69.60, Baidu lost 1.9 per cent to HK$89.75, while video-game publisher NetEase slumped 4 per cent to HK$96. HSBC lost 0.6 per cent to HK$41.55 before its third-quarter report card next week.

Hong Kong developers fell further: Sun Hung Kai Properties lost 0.5 per cent to HK$90.50, New World Development lost 1.9 per cent to HK$18.42 and Wharf REIC tumbled 2.7 per cent to HK$35.40.

China’s economic outlook and the Fed’s policy tightening have weighed on markets, Lorraine Tan, Morningstar’s director of equity research in Asia, wrote in a report on Thursday. “There are high-quality names at attractive prices, but we expect volatility to persist in the near term,” she added.

China is due to publish its latest economic update, including the third-quarter GDP report any time soon. The data, due this week, was delayed without a reason.

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