Hong Kong stocks fell from a two-week high amid concerns about earnings slippage on Covid-19 lockdowns as XPeng, Kuaishou and Alibaba Group Holding prepare to issue their report cards this week. Beijing also stoked concerns about tighter social mobility controls. The Hang Seng Index retreated 1.2 per cent to 20,470.06 at the close of Monday trading, paring nearly a third of last week’s 4.1 per cent rally . The Tech Index fell 2.5 per cent, while the CSI 300 Index retreated 0.6 per cent. Alibaba Group Holding, the owner of this newspaper, declined 3.4 per cent to HK$85.10 while Kuaishou weakened 7.4 per cent to HK$65.95 and XPeng sank 6.5 per cent to HK90.85. All three expected to report their quarterly earnings this week. Meituan dropped 3.1 per cent to HK$167.70 while Li Ning slumped 9.1 per cent to HK$54.15. Earnings from Tencent Holdings and JD.com last week trailed market consensus by a wide margin, with the full brunt of lockdowns in Shanghai yet to be accounted for, prompting strategists to warn about potential for more setbacks in the market. “Macro and consumption pressures may lead to downward revisions in corporate earnings” in the near term, according to Lim Soo Hai and William Fong, Asian equity strategists at Barings. “Sentiment may be poised to rebound once the market agrees that the end of the tunnel is nearing.” Earnings pitfall awaits China tech stock traders as lockdown blunts spending About 86 per cent of all Chinese onshore and offshore firms have reported their earnings for the March quarter, Goldman Sachs said in a May 20 report. Earnings rose an average of 2 per cent, versus consensus estimates of 9 per cent for MSCI China Index, according to data compiled by the US bank. The cost of lockdowns has prompted economists at Goldman and JPMorgan Private Bank to cut their growth forecasts for China this year. The economy is set to contract this quarter, JPMorgan said, requiring an exceptional rebound in the second half even under tough lockdown policy. Meanwhile, authorities in Beijing told 3.1 million residents in Haidian district to work from home while some limited residential areas were locked down to control Covid-19 cases, fuelling worries about wider lockdown akin to measures imposed in Shanghai. AAC Technologies slumped 6.9 per cent after index compiler Hang Seng Indexes Company decided to remove the stock from its main benchmark index from June 13 following a quarterly review. Why the seventh week of Shanghai’s lockdown feels like a parallel universe The four index additions advanced. Semiconductor Manufacturing International Corp rose 3.3 per cent while shipping firm Orient Overseas jumped 6.3 per cent. Car retailer Zhongsheng Group added 0.1 per cent and aluminium manufacturer China Hongqiao Group surged 7.9 per cent. Investors remain cautious as Beijing continues to offer selective stimulus to support the economy. Chinese banks cut the five-year loan prime rate on Friday to ease mortgage financing, after leaving it unchanged for two months. The one-year rate was earlier lowered in December and January. “It’s important to stress, as we have many times over the last year, that as long as lockdowns are in place, other stimulus measures are rendered ineffective,” JPMorgan Private Bank said in a note on May 19. “And as long as the threat of future lockdowns persists, consumption and business investment will likely remain weak.” Gains in major Asia-Pacific markets were muted on Monday. Japanese shares gained 1 per cent, while South Korean stocks added 0.3 per cent. The Australian stock benchmark rose 0.1 per cent.