Hong Kong stocks hold at 11-month low as HSBC, ICBC lead slump among banks on earnings, property risks

Caution prevailed after Standard Chartered reported worse-than-expected earnings last week on credit impairment related to China’s commercial property sector

Hang Seng Index is set for a third straight month of decline in October, while foreign investors dump their bets on A shares

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A public screen displaying stock figures in Shanghai in June 2023. Photo: Bloomberg

Published: 10:28am, 30 Oct 2023Updated: 5:12pm, 30 Oct 2023

Hong Kong stocks erased losses after a late rally electric-car maker BYD before its expected record earnings. China’s biggest lenders including Bank of China slumped, while HSBC weakened amid concerns about their loans to the nation’s ailing property sector.

The Hang Seng Index closed little changed at 17,406.36 on Monday, after losing as much as 1 per cent. The Tech Index gained 1.3 per cent while the Shanghai Composite Index gained 0.1 per cent.

BYD climbed 0.2 per cent to HK$246.20, overturning a drop of as much as 2 per cent as the carmaker prepares to publish its third quarter results. Tencent jumped 1 per cent to HK$296, Alibaba climbed 0.7 per cent to HK$83, while Hansoh Pharma surged 6.3 per cent to HK$14.96 and Wuxi Biologics jumped 5.9 per cent to HK$50.55.

Banks were a drag on the market. Industrial and Commercial Bank of China or ICBC slumped 3.6 per cent to HK$3.71 and China Construction Bank lost 2.2 per cent to HK$4.46. Bank of China weakened 1.8 per cent to HK$2.71 and HSBC retreated 1.5 per cent to HK$57.20

Both Bank of China and HSBC missed market estimates for last quarter, their report cards today showed.

“Hong Kong stocks will continue to face long-term uncertainty, as it still remains to be seen how the recent supportive policies will shore up expectations of an economic recovery,” Dai Qing, analyst at Guotai Junan Securities wrote in a note on Sunday.

The Hang Seng Index has dropped 2.3 per cent this month, set for a third straight monthly loss amid China’s shaky economic recovery and rising geopolitical tensions in the Middle East. Foreign investors have sold more than 160 billion yuan of A shares in the past three months, according to Stock Connect data.