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A pedestrian looks at the electronic screen displaying the stock price of Hang Seng Index members outside a bank in Mong Kok, Hong Kong. Photo: Winson Wong
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SMIC, Alibaba lead tech slide in Hong Kong as market braces for new US curbs while the Israel-Hamas war saps risk appetite

  • The Biden administration is said to be preparing tighter curbs on technology exports to China, closing loopholes in sanctions
  • Government reports this week may show China’s economy slowed last quarter, while industrial production, retail sales and employment stabilised
Hong Kong stock market
Jiaxing Li
Jiaxing Li
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Hong Kong stocks declined as investors braced for tighter US curbs on technology exports to China and concerns about the worsening Israel-Hamas war. Government reports this week may show the Chinese economy slowed last quarter.

The Hang Seng Index slid 1 per cent to 17,640.36 on Monday, retreating for a second day from a five-week high. The Tech Index slipped 1.8 per cent as China’s top chip makers tumbled. The Shanghai Composite Index lost 0.5 per cent.

China’s biggest semiconductor producer SMIC slumped 2.7 per cent to HK$20.15 while Hua Hong tumbled 3.8 per cent to HK$19.12. Alibaba Group dropped 1.6 per cent to HK$81.30 and Tencent weakened 1.8 per cent to HK$301.20, whileBaidu lost 2.6 per cent to HK$121.40.

Casino operator Sands China fell 3 per cent to HK$21.30 while online travel agency Trip.com lost 2.4 per cent to HK$255.60.
The Biden administration is said to be planning to tighten regulations on the sale of graphics chips for artificial intelligence purposes and advanced chip-making equipment to Chinese companies, Reuters reported on Sunday. The impending new curbs followed Huawei’s latest smartphone utilising secretive advanced chips.

“Geopolitical risks are disrupting the recovery process in the short term,” Huatai Securities analyst Wang Yi said in a note to clients on Monday. The war in Israel has led to a sharp increase in risk aversion, he wrote.

Israel should stop its “collective punishment” of Gaza’s civilians with actions beyond self-defence, Chinese Foreign Minister Wang Yi said, warning it would worsen regional tensions and lead to humanitarian disaster. US Secretary of State Antony Blinken urged Beijing to use its influence to prevent other groups from attacking Israel and widening its war with Hamas.

03:43

Protesters on both sides of Israel-Hamas conflict flood streets around the world

Protesters on both sides of Israel-Hamas conflict flood streets around the world

Elsewhere, China’s gross domestic product probably rose at an annual pace of 4.5 per cent last quarter, according to consensus from economists tracked by Bloomberg. That is slower than the 6.3 per cent gain in the second quarter.

Other forecasts showed industrial production, retail sales and employment are likely to have stabilised.

Meanwhile, the People’s Bank of China on Monday injected 289 billion yuan (US$40 billion) of liquidity into the financial system through its medium-term lending facility. Governor Pan Gongsheng earlier said it would better leverage monetary policies to boost demand and confidence, suggesting potential easing measures are in store.

Key Asian markets weakened. South Korea’s Kospi dropped 0.8 per cent and Australia’s S&P/ASX 200 lost 0.4 per cent, while Japan’s Nikkei 225 slipped 2 per cent.

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