The Hang Seng Index slipped 0.3 per cent to 16,081.89 on Wednesday, reversing a 1.7 per cent gain. The Tech Index lost 1.6 per cent, while the Shanghai Composite Index advanced 1.4 per cent.
Alibaba Group dropped 1.5 per cent to HK$74.90, overturning an earlier 1.4 per cent gain on optimism quarterly income from the operator of Taobao e-commerce platform will exceed forecasts. Rival JD.com declined 2.6 per cent to HK$90.35. Chip maker SMIC slumped 8 per cent to HK$14.12 and PC maker Lenovo lost 4.3 per cent to HK$8.12.
Tempering losses, WuXi Biologics jumped 5.6 per cent to HK$19.18, while its affiliate WuXi AppTec gained 5 per cent HK$51.55 as they hastened open-market stock repurchases after tanking in a major sell-off sparked by a proposed US legislation against Chinese biotech firms.Net income for Alibaba, the owner of this newspaper, probably rose 20 per cent to almost 48 billion yuan (US$6.7 billion) in the December quarter from the preceding three months, according to analysts tracked by Bloomberg. Other earnings on Tuesday from fast-food chain operator Yum China and chip maker SMIC beat market consensus.
Corporate actions like buy-backs may keep the market upbeat, in a week when China’s state-run funds and market regulator have intervened to arrest a slump in confidence. Stocks listed in Shanghai, Shenzhen and Hong Kong have lost more than US$5 trillion since early 2021 as China’s post-Covid economic recovery ran out of gas.
Hong Kong stock market in for a topsy-turvy ride in Year of the Dragon: CLSA
This week’s almost 4 per cent turnaround in the Hang Seng Index followed bets among traders on China’s state-run funds to put a floor on the three-year rout, and amid speculation the losses have prompted the country’s top leader and regulators to reassess their responses to the slump.
Still, such tactics may exacerbate market concerns, said Brock Silvers, managing director at Kaiyuan Capital in Hong Kong. The current mini-rally on hopes for an artificially high floor for equities may eventually be seen as a propitious exit window, he cautioned.
“Authorities are clearly distressed by the market’s ongoing slide, but market interventions are unlikely to provide long-term relief,” he added. “Neither restrictions on short selling and derivatives, nor the deployment of the ‘national team’, will do anything to change the underlying drivers of negative sentiment.”
03:05
Lunar New Year rush under way in China with more travel overseas and to major domestic cities
Lunar New Year rush under way in China with more travel overseas and to major domestic cities
Yum China, which owns fast-food chains KFC and Pizza Hut, surged 15 per cent to HK$332.80 after both sales and profits beat estimates in the fourth quarter.
Financial markets in mainland China will shut for the Lunar New Year from February 9 to 16. In Hong Kong, trading will be shortened to half a day on February 9 and close for the festival on February 12 and 13.
One stock made its debut on Wednesday. Chengdu Sino-Microelectronics Tech, a maker of integrated circuits, jumped 25 per cent to 19.69 yuan in Shanghai.
Other major Asian markets were mixed. Japan’s Nikkei 225 slipped 0.1 per cent, while South Korea’s Kospi rose 0.6 per cent and Australia’s S&P/ASX 200 added 0.5 per cent.
ncG1vNJzZmivp6x7tK%2FMqWWcp51kr7a%2FyKecrKtfmLWqusBmma6rmaOytL%2BOmqmtoZOhsnB%2FkW5oa2hnZLWwusZmoqiml2LAtbvCpKpmnaipsq%2BwjKCYoqajYsCxwdGrnJ1lk522r63SZqeopJmYxm6%2F1KmnqKqkYq6vsIysq5qslWKvtsXIp55moJGesaq4wKhkrK2inLK0ecChnJqc