Hong Kong stocks sink as Ukraine war damages nuclear plant while Bilibili plunges 12 per cent on widening losses

On Mar 4, 2022 33

Investors watch stock prices at a brokerage in Beijing. Photo: AP

Benchmark index heads for a third week of losses for the worst streak this year, as war in Ukraine escalates with a hit on nuclear power plant
Leading trio of Alibaba, Tencent and Meituan crash by 3.7 per cent to 4.9 per cent as tech benchmark tumbles almost 4 per cent; Bilibili plunges 12 per cent

Hong Kong stocks tumbled, heading for a third week of losses, after an escalation in the Russia-Ukraine war caused damages to Europe’s biggest nuclear power plant.

The Hang Seng Index sank 2.5 per cent to 21,901.64 as of 1.54pm local time, taking the five-day decline to 4 per cent. The three-week retreat is the longest streak since December. The Tech Index plunged 3.9 per cent, while China’s Shanghai Composite Index dropped 0.9 per cent.

Twelve index members including Hong Kong Exchanges and Clearing and AAC Technologies fell to new one-year lows, according to Bloomberg data. Alibaba Group Holding, Tencent Holdings and Meituan lost by 3.7 per cent to 4.9 per cent. Concerns about Beijing tightening its grip on the industry have added to the poor sentiment.

Japan’s Nikkei 225 slumped almost 3 per cent, leading losses in regional equity markets. Haven trade returned, keeping gold futures at a one-year high while crude oil futures traded near US$111 a barrel after surging past US$100 last month for the first time since 2014.

“Given the intensified geopolitical tensions and jitters about a fresh round of regulatory scrutiny of the tech sector, the pressure on Hong Kong stocks remains,” said Hayman Chiu, an analyst at Cinda International in Hong Kong. The city’s stocks could test a new low, he added.

The Hang Seng Index has fallen 6.5 per cent this year, and would cap the worst quarterly start to a year since 2020. More than US$132 billion has been erased from Asia’s third-largest market in 2022, making it among the world’s cheapest.

The Zaporizhzhia Nuclear Power Plant in Ukraine, the largest in Europe, caught fire from Russian shelling on the ninth day of invasion, Ukrainian Foreign Minister Dmytro Kuleba said. President Vladimir Putin had earlier put Russia’s nuclear-capable forces on alert amid strong resistance.

“Investors are moving away from riskier assets,” said Matt Simpson, an analyst at City Index in Sydney. “The world is watching to see if things escalate. This will likely be a key theme heading into the European and US [trading] session, to see how world leaders respond.”

Video-streaming platform operator Bilibili plunged 12 per cent to a record low after fourth-quarter losses widened from a year ago. Electric-vehicle maker BYD lost 7.7 per cent after sales dropped by 5 per cent in February from a month earlier. Its Shenzhen-listed shares sank 5.4 per cent.

Bottled water maker Nongfu Spring dropped 2.2 per cent and PC maker Lenovo Group slumped 4.8 per cent before they will be added to the Hang Seng Index on March 7.

Elsewhere, traders are keeping a close watch on China’s annual political gatherings this week for clues on growth and spending targets. The political conference begins on Friday while the legislative meeting kicks off on Saturday.

Author: Zhang Shidong, SCMP