Hong Kong stocks drop for a seventh straight day as fears grow about mainland Chinese coronavirus outbreaks
- The seven-day slide marks the Hang Seng Index’s worst sequence since July
- Chinese sportswear companies were the biggest gainers on the benchmark gauge
Hong Kong stocks fell for a seventh straight day, capping the longest losing streak in almost four months, as worries deepened about the Chinese economy and the worsening coronavirus outbreak in the mainland.
The Hang Seng Index fell 1 per cent to 24,857.01 at noon local time. The seven-day slide marked the benchmark’s worst sequence since July 8. The Hang Seng Tech Index retreated 1.3 per cent, dragged down by a 1.8 per cent decline in Alibaba to HK$158.70, while Tencent fell 0.6 per cent to HK$461.20.
In the mainland, the Shanghai Composite Index lost 0.4 per cent. A notice from the Chinese government released on Monday evening urging households to stock up on daily necessities has sparked widespread concern online about some recent Covid-19 outbreaks.
Chinese sportswear companies were the biggest gainers on the Hang Seng gauge. Li Ning jumped 5.4 per cent to HK$86.25, while Anta Sports Products rose 2.7 per cent to HK$121.90. Property developers Country Garden Holdings and Henderson Land racked up gains of at least 1 per cent.
Losers on Wednesday included solar power glass manufacturer Xinyi Solar, which tumbled 8.5 per cent to HK$14.06 and carmaker Geely Auto, which slid 5 per cent to HK$24.90. Shenzhou International Group, a Chinese knitwear manufacturer and exporter, slumped 4.4 per cent to HK$158.10.
The Chinese economy saw weakness in October amid debt woes in the property market and an energy crisis that had weighed on manufacturing, while strict coronavirus controls were imposed to suppress outbreaks. China’s new locally transmitted cases spiked to a three-month high of 93 cases on Tuesday, prompting more frequent localised lockdowns.
The market faces headwinds “with all of the three horse carriages showing signs of slowdown”, said Will Shum, portfolio management director in Hong Kong at iFast Financial, referring to China’s three main growth drivers of consumption, investment and exports. China’s economy grew 4.9 per cent last quarter, down from the second quarter growth rate of 7.9 per cent.
On the mainland, Beijing Dataway Horizon, a data analysis provider, surged 145 per cent to 47.50 yuan on its first day of trading in Shenzhen.
US equities rose overnight to record highs buoyed by strong corporate earnings. Traders await a decision from the US Federal Reserve on its tapering schedule.
Other major markets in Asia were mixed on Wednesday. The Australian stock benchmark advanced 0.8 per cent, equities in South Korea retreated 1.3 per cent, while Japanese markets are closed for a holiday.
Author: Cheryl Heng, SCMP