WuXi Bio, Lenovo sink as Hong Kong stocks’ 3-day rally cut short by rising US-China tensions

The benchmark Hang Seng Index marked its first winning week of the year, but the gains were trimmed to 4.2 per cent on today’s losses

Geopolitical risks will continue to be an overhang as this is an election year, Dickie Wong of Kingston Securities says

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Hong Kong stocks enjoyed their best week in more than six months. Photo: Xiaomei Chen

Published: 10:32am, 26 Jan 2024Updated: 10:11pm, 26 Jan 2024

Hong Kong stocks fell on Friday, snapping three days of gains, as investor sentiment soured amid concerns over deteriorating US-China relations and profit-taking after stellar gains this week. WuXi Biologics and Lenovo slumped.

The Hang Seng Index declined 1.6 per cent to 15,952.23 at the close of trading on Friday, after rallying 8.4 per cent over the preceding three days. The Tech Index dropped 3.8 per cent, while the Shanghai Composite Index added 0.1 per cent.

WuXi Biologics sank 18.2 per cent to HK$24.55, the biggest drop since December 4, to erase HK$23.2 billion (US$3 billion) from its market value. A US lawmaker this week proposed a bill to block Chinese biotechnology companies doing business with the US government for alleged complicity with the military.

Tencent eased 2.8 per cent to HK$282.80, Alibaba lost 3.3 per cent to HK$70.90 and Meituan dropped 3.9 per cent to HK$66.70. Electric-car maker BYD fell 7.8 per cent to HK$27.90, while rival Li Auto lost 4 per cent to HK$106.90.

“The sentiment is still fragile, and confidence has yet to return,” said Dickie Wong, executive director at Kingston Securities. Investors panic and start selling immediately when they see negative news on more potential US bans, he said.