Alibaba, Kuaishou pace Hong Kong stock losses on tech earnings outlook while Beijing faces tighter Covid rules

Name: Panic buying grips Beijing supermarkets as lockdown rumours circulate
Uploaded: 2022-05-23T02:31:21.000Z
Duration: 1 min 40 s
Description: Panic buying grips Beijing supermarkets as lockdown rumours circulate

Alibaba, Kuaishou, XPeng among tech companies preparing to report this week following big misses from Tencent, JD.com

In Beijing, authorities told Haidian district’s 3.1 million residents to work from home while some limited residential areas were locked down to control Covid-19 cases

Reading Time:2 minutes

Why you can trust SCMP

Mounting concerns about tech earnings slowdown continue to weigh on stock market. Photo: Dreamstime/TNS

Cheryl Heng

Published: 10:31am, 23 May 2022Updated: 4:50pm, 23 May 2022

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.”

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.

01:40

Panic buying grips Beijing supermarkets as lockdown rumours circulate