JD.com, Tencent, Longfor slump in Hong Kong sell-off as China shows no stimulus urgency, Wall Street banks cut GDP targets

Some Wall Street banks trimmed their GDP forecasts after growth last quarter trailed market consensus

Beijing has refrained from unleashing big stimulus measures amid concerns about debt, fiscal overreach, Manulife Investment said

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People walking past electronic boards displaying the Hang Seng Index and stocks outside the Exchange Square in Central, Hong Kong on June 30. Photo: Yik Yeung-man

Published: 10:41am, 18 Jul 2023Updated: 5:10pm, 18 Jul 2023

Hong Kong stocks fell, snapping a five-day advance as China showed no urgency in reflating the economy with growth lagging market expectations. Some Wall Street banks lowered their targets again.

The Hang Seng Index slid 2.1 per cent to 19,015.72 on Tuesday from Friday’s closing level. Stocks and futures were halted on Monday on a typhoon warning. The Tech Index declined 2.4 per cent while the Shanghai Composite Index slipped 0.4 per cent.

Alibaba Group slumped 3.7 per cent to HK$89.50, e-commerce rival JD.com tumbled 4.7 per cent to HK$143.40 and Tencent dropped 5 per cent to HK$334.80. Macau casino operator Sands China weakened 1.9 per cent to HK$28.25, and peer Galaxy Entertainment lost 0.7 per cent to HK$54.05.

Developer Longfor sank 9.9 per cent to HK$15.46, and peer Country Garden fell 7.3 per cent to HK$1.39, leading a sell-off in property stocks. A gaugu tracking mainland Chinese developers in Hong Kong crashed 5.4 per cent, the most in seven months amid worries about weak home sales.

China’s gross domestic product grew at an annual pace of 6.3 per cent last quarter, trailing the consensus forecast of a 7.1 per cent gain. Beijing’s 2023 target of “around 5 per cent” is now under threat from weak consumer confidence, a struggling housing market, and record youth unemployment, analysts said.

“We do not think [the GDP] data will prompt Beijing to step up stimulus measures,” Nomura analysts including Ting Lu wrote in a note. Growth will ease further in the second half and Beijing’s supportive measures will be “far from enough” to turn the economy around, they said.