Hang Seng Index slides below 17,000 mark as stocks pummelled on China slowdown concerns, flare-up in Covid cases
- The People’s Daily says zero-Covid is crucial to economy, lives after a recent flare-up in domestic cases
- Alibaba, Meituan, Longfor, Country Garden lead losses as the Hang Seng Index slips through another psychological floor
Hong Kong stocks fell for a fourth day, with the benchmark index headed for a close below the 17,000 mark for the first time in 11 years. Concerns about China’s economic slowdown deepened as Beijing squashed hopes for an imminent reversal to its zero-Covid policy.
The Hang Seng Index retreated 1.6 per cent to 16,948.51 at the local noon trading break, sliding below 17,000-point mark for the first time since October 4, 2011. The Tech Index tumbled 3 per cent, while the Shanghai Composite Index climbed 0.4 per cent. Stocks in Japan, South Korea and Taiwan sank.
Alibaba Group Holding fell 2.7 per cent to HK$76.55 and Meituan sank 6.5 per cent to HK$150.90. Chinese developer Longfor Group lost 6.4 per cent to HK$20.45 and Country Garden slumped 5.7 per cent to HK$1.67. Geely Auto and peer BYD lost more than 1.6 per cent.
The zero-Covid policy is sustainable and the country must stick to the regime, which is key to economic stability and protection of lives, the People’s Daily, the Communist Party’s mouthpiece, said in a commentary on Tuesday. The editorial came as the nation logged almost 2,000 new coronavirus infections on Monday and the party assembles for its national congress this weekend.
“Hong Kong stocks will continue to be in the doldrums, given the Covid resurgence and policy tightening oversease,” said Zhang Yidong, a strategist at Industrial Securities in Shanghai. “The flare-up in the pandemic and a slumping property market will make it harder for the economy to rebound this time.”
Shanghai, the nation’s biggest commercial city, has doubled down on Covid tightening measures, requiring all arriving people to take three nucleic acid tests within three days, as the metropolitan reported one new infection outside quarantine on Monday.
The Hang Seng Index tumbled 21 per cent last quarter, the worst since 2011. Losses in the 73-member index contributed to the broader US$1.5 trillion rout across the local stock market this year, according to Bloomberg data.
Local stocks slumped 3 per cent on Monday after a stronger-than-expected US jobs report on Friday strengthened bets for another jumbo rate hike in November. US consumer prices probably rose 8.1 per cent in September from a year earlier, versus 8.3 per cent in August, according to economists, before a government report on Thursday.
Contemporary Amperex Technology, China’s biggest maker of lithium-ion batteries for electric vehicles, jumped 5.3 per cent to 413.67 yuan in Shenzhen. Net income for the first nine months probably surged by as much as 132 per cent from a year earlier, the company said in a filing.
Suzhou K-Hiragawa Electronic Technology, a maker of functional battery devices, surged by 44 per cent to 49.94 yuan on the first day of trading in Shanghai. Bide Pharmaceutical slid 19 per cent to 71.11 yuan in debut.
Other key markets in Asia declined. Japan’s Nikkei 225 and South Korea’s Kospi fell more than 2 per cent, while Taiwan’s Taiex slumped 4 per cent, with sell-offs in chip stocks amid the US’s expanded sanctions against China’s tech industry.
Author: Zhang Shidong, SCMP