Hong Kong stocks slip before Alibaba, Chinese tech peers release earnings while oil, casino firms add to gloom
- Alibaba and Baidu are seen reporting a 17 per cent and 82 per cent slide in quarterly earnings, based on consensus estimates
- Oil stocks weaken oil supply concerns while concession worries dominate Macau casino operators
Hong Kong stocks fell as oil companies and casino operators tumbled. Alibaba Group Holding led tech peers lower before earnings reports that may show the effects of regulatory crackdown on Chinese tech giants.
The Hang Seng Index retreated 0.5 per cent to 25,595.19 at the local noon trading break. The gauge had rallied 3.8 per cent in the preceding six days in its longest run since mid-February on policy easing bets and optimism surrounding US-China ties.
The Hang Seng Tech Index declined 0.7 per cent, dragged down by NetEase‘s 3.7 per cent slump and Meituan’s 1.6 per cent loss. China’s Shanghai Composite Index added 0.2 per cent. Alibaba fell 0.6 per cent and Sunny Optical lost 3.3 per cent.
Alibaba, the owner of this newspaper, may report a 17 per cent slide in earnings from a year earlier when the e-commerce group releases its third-quarter report card on Thursday, according to the consensus among analysts tracked by Bloomberg. Separately, Baidu is expected to log an 82 per cent slump in profitability.
China’s biggest oil companies added to the weaker sentiment, following a report by the Post that the US has asked China to release its oil reserves as part of discussions on economic cooperation. More supply will help temper recent gains in crude prices and ease pressures on global inflation. CNOOC and PetroChina fell by more than 0.5 per cent.
Elsewhere, Macau casino operators also took a hit as uncertainty plagued the extension and status of their gambling concessions. Galaxy Entertainment retreated 1.1 per cent while Sands China declined 1.7 per cent.
Macau’s chief executive Ho Iat Seng on Tuesday remained tightlipped on the expected timeline for revisions to gaming licenses, despite its expiry due next June.
Guotai Epoint Software, a developer of software products, dropped 2.7 per cent in its Shanghai debut. While investors might be used to reaping outsized gains from IPOs in the mainland, listing reforms introduced in August could mean more frequent first-day losses and shrinking returns.
Major markets in Asia-Pacific were lower on Wednesday. The South Korean and Japanese benchmark each retreated 1 per cent, while Japanese equities slipped 0.4 per cent. US equities advanced overnight on strong retail sales.
Author: Cheryl Heng, SCMP