Hong Kong stocks slip as mainland China funds trim bets on Tencent, HKEX while Macau casino operators tumble

  • Mainland Chinese investors turned net sellers of Hong Kong-listed stocks on Thursday with Tencent, HKEX, Sunny Optical among those under pressure
  • Hang Seng remains 3.3 per cent stronger from last Friday, set for its best week in about 11 months

Hong Kong stocks fell for the first time in three days amid steep losses in technology companies as mainland Chinese investors trimmed their bets. Casino operators slipped while a report showed Chinese exports and imports cooled last month.

The Hang Seng Index retreated 1 per cent to 24,179.16 at the local noon trading break, while the Tech Index declined 1.8 per cent with Alibaba Group Holding, Tencent Holdings, Meituan and JD.com falling by more than 2.1 per cent. The Shanghai Composite Index declined 0.6 per cent.

Mainland funds were net sellers of Hong Kong-listed stocks on Thursday as the rally lost steam, with Tencent, Hong Kong Exchanges & Clearing and Sunny Optical among those under selling pressure, according to Stock Connect data. Still, the Hang Seng Index has risen about 2.9 per cent for the week, the most in about three months.

“With the full-year earnings announcement coming up in March, it is likely analysts would cut target prices on several tech stocks, thus the momentum being much weaker than before despite the rebound,” Castor Pang Wai-sun, head of research at investment services firm Core Pacific-Yamaichi, said by phone.

Alibaba slid 3.8 per cent to HK$127.20 after affiliate Ant Group failed to progress the sale of a stake in its consumer finance unit called Chongqing Ant to several parties including Cinda Asset Management.

Macau casino operators declined amid speculation the city’s government will unveil amendments to gambling law as early as Friday, which may affect concession renewals later this year. Sands China fell 1.2 per cent while Galaxy Entertainment slipped 0.3 per cent.

Elsewhere, Chinese exports rose 20.9 per cent in December from a year earlier compared with 22 per cent in November, customs data showed on Friday, coming within analysts’ predictions in a Bloomberg survey. Imports cooled at 19.5 per cent versus a projection for 31.7 per cent.

A slump in the housing market and sporadic virus outbreaks have unsettled China’s economy as the recovery since mid-2021 lost much of its momentum. Policymakers have pledged to stabilise growth as a priority in 2022 after easing liquidity and borrowing costs last month.

Gross domestic product likely expanded at an annual rate of 3.6 per cent in the final three months of 2021, according to the median forecast of economists tracked by Bloomberg. Growth was 4.9 per cent in the preceding quarter. The government will report the GDP data on Monday.

Major markets in Asia retreated in tandem with overnight losses in key US stock indices. Japanese shares slipped 1.6 per cent, while Korean and Australian equities saw losses ranging from 1 to 1.5 per cent.

Author: Cheryl Heng, SCMP

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