Hong Kong stocks retreat as Alibaba drags tech peers lower with eyes on key China political meeting
- President Xi, who is also general secretary of the Communist Party, will open the sixth plenary session of the 19th Central Committee on Monday
- Stocks decline amid virus outbreak concerns, even as an official report on Sunday showed exports grew faster than expected last month
Hong Kong stocks declined for a second day with tech firms leading losers as the Chinese Communist Party kicked off a key meeting in Beijing under a cloud of economic slowdown.
The Hang Seng Index retreated 0.6 per cent to 24,728.63 at the local noon break. The Hang Seng Tech Index slid 1.4 per cent, while China‘s Shanghai Composite Index added 0.1 per cent.
Alibaba Group Holding, the owner of this newspaper, sank 2.3 per cent, while its health unit lost 1.9 per cent. Tencent Holdings and Meituan both retreated by at least 1.3 per cent. Analysts have trimmed their price targets on the trio by 18 to 25 per cent over the past six months following a crackdown on their businesses.
President Xi Jinping, who is also general secretary of the party, will open the sixth plenary session of the 19th Central Committee on Monday. Investors will be evaluating a new resolution on the party’s “major achievements and historical experience,” which is expected to be adopted at a political gathering, for clues on policies.
After chalking up a 3.3 per cent gain in October, the benchmark Hang Seng Index has since given up 2.6 per cent this month. They retreated even as exports grew last month at a faster pace than economists predicted, while imports trailed estimates. The spread of Delta variant in many provinces have led to stricter lockdowns, weighing on economic recovery efforts.
“ While we still expect more stimulus from China, it has been less forthcoming than we originally expected, with policymakers prioritising deleveraging over short-term growth,” Pictet Asset Management said in its latest market outlook report. “A renewed surge in Covid cases in China is also a cause for concern.”
Biotechnology stocks retreated, as Pfizer released data that its Covid-19 pill could reduce hospitalisations and deaths in high-risk patients. WuXi Biologics was the index‘s biggest loser as it plunged 8.3 per cent, while. Sino Biopharmaceutical declined 5.3 percent.
Major markets in Asia retreated. Stock benchmarks in South Korea lost 1 per cent and Japanese equities dipped 0.2 per cent, while the Australian index was little changed.
Elsewhere, Chinese hotpot chain Haidilao bucked the trend. The stock surged 6.9 per cent to HK$22.50 as the restaurant announced on Friday that it would shut down or suspend operations of around 300 restaurants to stem losses. The group said it would slow down expansion and improve operating performance.
Uju Holding, which provides video marketing services, slumped 1 per cent on its first day of trading to HK$6.63.
Author: Cheryl Heng, SCMP