Hong Kong stocks retreat as Meituan sinks before earnings date while JD.com, NetEase lead gains among new index members

  • Meituan slumps 3.4 per cent before its earnings report on Friday as traders grow wary of poor reports from Chinese tech bellwethers
  • JD.com, NetEase, China Resources Beer and ENN Energy post strong gains before their official entry into the Hang Seng Index family

Hong Kong stocks fell to near a two-week low as investors absorbed a slew of poor tech earnings and more companies including Meituan and Kuaishou Technology prepare to publish their quarterly report cards.

The Hang Seng Index fell 0.4 per cent to 24,962.11 at the local noon trading break. The benchmark lost 1.1 per cent last week, following a series of underwhelming earnings from the tech sector. The Hang Seng Tech Index declined 0.8 per cent while the Shanghai Composite advanced 0.7 per cent.

Alibaba dropped 0.3 per cent to HK$138.90, adding to its worst week on record in Hong Kong trading when the stock crashed 16 per cent after a major earnings miss. Its American depositary shares slumped 12 per cent last week, the most in three months. The e-commerce group is the owner of this newspaper.

The earnings shock has contributed to US$163 billion of erosion in market value last week among Chinese tech stocks represented in the Hang Seng Tech Index and the Nasdaq Golden Dragon China Index, according to Bloomberg data. Investors will look forward to the report cards from Meituan and Kuaishou, two of the biggest index members, later this week.

Food-delivery platform operator Meituan sank 3.4 per cent to HK$271.20 before its quarterly earnings on November 26. The firm is expected to post a widening loss of 5.25 billion yuan in the third quarter, from the preceding quarter, according to consensus of analysts tracked by Bloomberg.

Kuaishou added 1.1 per cent to HK$95.20 before the short-video sharing platform operator report on November 23. The short-video operator may have incurred a loss of 8.6 billion yuan.

Elsewhere, China’s antitrust regulator on Saturday imposed its latest fines on technology giants for violating anti-monopoly rules, including Alibaba and Baidu, involving unreported deals dating back to years. Baidu retreated 1.3 per cent.

Four stocks that will join the Hang Seng Index family from December 6 advanced. JD.com surged 1.9 per cent while NetEase added 3.2 per cent. China Resources Beer gained 0.4 per cent while ENN Energy soared 3.6 per cent. They will become index constituents from December 6 following a quarterly review last week.

Major Asia-Pacific markets were mixed in early trading. The benchmarks in Australia and Japan slipped 0.4 and 0.2 per cent respectively while South Korean equities advanced 1.2 per cent.

Author: Cheryl Heng, SCMP

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