Hong Kong stocks mixed as Tencent, Xiaomi surrender gains before earnings reports while Geely jumps on auto sales

  • Tencent falls 0.4 per cent while Xiaomi and Meituan retreat by at least 0.3 per cent before key earnings reports from index heavyweights
  • Geely leads carmakers higher after China’s new-energy car sales more than double in October

Hong Kong stocks wavered, with the benchmark hovering near a one-month low, before a raft of earnings reports by bellwether companies including Tencent Holdings and Xiaomi Corp. The Federal Reserve flagged risks associated with Chinese assets.

The Hang Seng Index slipped 0.1 per cent to 24,745.92 at the local noon break on Tuesday, erasing an earlier gain of as much as 0.8 per cent. The Hang Seng Tech Index lost 0.3 per cent, while the Shanghai Composite Index retreated less than 0.1 per cent.

Tencent fell 0.4 per cent to HK$462. Third-quarter net income at the WeChat operator and online-games developer probably increased 0.6 per cent from a year ago, according to the consensus in a Bloomberg survey before its report card on Wednesday. Xiaomi and Meituan both slid 0.3 per cent.

A slew of corporate earnings report cards from the likes of Xiaomi and Meituan will follow on Monday, offering a look into how Chinese tech juggernaut fared under a regulatory onslaught that ravaged the e-commerce to ride-hailing, food delivery and after-school tutoring sectors.

Local sentiment was cautious as the Fed warned about inflated asset prices in its Financial Stability report overnight, highlighting stresses in the real estate market and potential spillover of risks from China’s financial markets, especially around the China Evergrande debt woes.

Other regional markets were also mixed, with Japan and South Korea’s stock gauges falling and the benchmark in Taiwan rising.

“With no thematic momentum one way or the other from Wall Street, Asian markets have been freed to set their own course, leading to a mixed day across the region,” said Jeffrey Halley, an analyst at Oanda.

Meanwhile, the Post reported that Hong Kong will lift a travel ban on mainland visitors by June next year at the latest. The quarantine-free border reopening will start with a daily quota of entrants. Discussions for resumption in air travel have not started, people familiar said.

Traders were also keeping a close watch on the ongoing plenary session of the Communist Party’s decision-making Central Committee in Beijing, which enters into a second day. The four-day conclave is expected to endorse a few resolutions and achievements by the ruling party and pave the way for the leadership reshuffle next year.

Geely Automobile Holdings jumped 2.2 per cent to HK$25.95 after its auto sales in October rose 7 per cent from a month earlier. BYD added 1.9 per cent to HK$309.80. Industry data showed sales of electric vehicles surged 148 per cent from a year earlier in October. Hotpot chain restaurant operator Haidilao International Holding lost 2 per cent to HK$21.60. The stocks jumped 4.8 per cent on Monday, spurred by the news that it will shut about 300 stores to stem losses.

Author: Zhang Shidong, SCMP

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