Hong Kong stocks surrender gains on tech retreat, China downgrades as Sunny Optical sinks 13 per cent on profit warning

China will optimise a stable and predictable development environment for the private sector to unleash their potential, according to an official statement

Sunny Optical said profit likely to shrink by 65 to 70 per cent in the half-year report to June 2023, from the same period last year

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Stock prices seen on screens inside a brokerage in Shanghai in September 2021. Photo: AFP

Published: 10:38am, 20 Jul 2023Updated: 5:19pm, 20 Jul 2023

Hong Kong stocks slipped for a third day as investors turned bearish on China and more analysts downgraded the nation’s growth outlook amid policy disappointment. Sunny Optical crashed 13.7 per cent on profit warning.

The Hang Seng Index fell 0.1 per cent to 18,928.02 to a one-week low on Thursday, reversing a rally of as much as 1.4 per cent. The Tech Index also surrendered gain, falling 1.2 per cent. The Shanghai Composite Index dropped 0.9 per cent.

Alibaba Group weakened 1.5 per cent to HK$89, Baidu lost 1.9 per cent to HK$139.40, while NetEase tumbled 2.8 per cent to HK$158.50. Casino operator Sands China dropped 1.4 per cent to HK$27.75 while peer Galaxy Entertainment weakened 0.2 per cent to HK$53.70.

Sunny Optical sank as much as 15 per cent to HK$66.30, the most since August 2018, before closing at HK$67.35. The company said first-half profit likely shrank by as much as 70 per cent from a year earlier to 407.4 million yuan (US$56.4 million). It makes smartphone parts for Chinese brands including Huawei, Oppo and Vivo.

“We expect only piecemeal easing in the near term, before policymakers roll out more meaningful measures towards late third quarter,” economists at Bank of America said, after lowering their GDP targets for 2023 and 2024 on weak data and policy response.

Most money managers in Asia are not convinced about China’s outlook and believe Chinese stocks could re-test the 11-year low seen in October last year, the US bank said in its July survey. Asian funds turned net underweight on China for the first time this year, it showed.

Hong Kong stocks rose earlier, after China said it would optimise a stable, fair, transparent, and predictable development environment for the private sector and fully unleash their vitality and potential, according to an official statement on Wednesday.

Hong Kong stocks surrender gains on tech retreat, China downgrades as Sunny Optical sinks 13 per cent on profit warning

China will optimise a stable and predictable development environment for the private sector to unleash their potential, according to an official statement Sunny Optical said profit likely to shrink by 65 to 70 per cent in the half-year report to June 2023, from the same period last year

China will optimise a stable and predictable development environment for the private sector to unleash their potential, according to an official statement

Sunny Optical said profit likely to shrink by 65 to 70 per cent in the half-year report to June 2023, from the same period last year