Most Hong Kong stocks decline as Meituan and tech leaders limp while BYD, CNOOC advance on industry outlook

  • China reported growth in exports, imports in May despite lockdown restrictions, beating consensus forecasts
  • BYD gains on stock buyback support and industry sales outlook while CNOOC is lifted by higher oil prices and tight inventory

Most Hong Kong stocks dropped as a rally in Chinese tech stocks cooled. Carmakers and oil producers gained on a brighter industry outlook, while a government report showed growth in China‘s external trade accelerated last month.

The Hang Seng Index declined 0.2 per cent to 21,961.60 at the local noon trading break, after surging on Wednesday to a two-month high. The Hang Seng Tech Index retreated 0.8 per cent while the Shanghai Composite Index dropped 0.5 per cent.

Meituan fell 2.6 per cent to HK$202.80 while eased 1.9 per cent to HK$249.40. Anta Sports slumped 3.7 per cent to HK$91. Carmaker BYD gained 0.2 per cent to HK$302.60 on buyback support while a jump in sales last month buoyed industry outlook. Oil explorer CNOOC added 3.2 per cent to HK$11.54 as crude topped US$122 a barrel on tight inventory.

China’s exports grew 16.9 per cent in May from a year earlier, while imports climbed 4.1 per cent, the customs office said on Thursday. Both exceeded market expectations of 8 per cent and 2.8 per cent respectively based on consensus tracked by Bloomberg, and also quickened from April.

China’s economic outlook has suffered several downgrades in forecasts as Covid-19 lockdowns hurt factory output. Moody’s last week cut its 2022 GDP estimate to 4.5 per cent versus the official target of 5.5 per cent, even with policy support and infrastructure stimulus.

A rally in Chinese tech stocks faded in Hong Kong, after reaching the highest level since April 6 this week on speculation China is ending a year-long crackdown on internet-platform companies. Investors remained cautious about the outlook as analysts cut their earnings and price targets.

Bilibili slumped 2.1 per cent before its quarterly earnings report today, giving up some of the 19.6 per cent surge on Wednesday. Analysts expect the short-video platform operator to incur a wider loss of 1.85 billion yuan from 904 million a year earlier.

Elsewhere, passenger car sales rose 30 per cent to 1.35 million units in May from a month earlier, Xinhua News Agency reported, citing data from an industry association. BYD, which sold 148 per cent more vehicles that month, has also said it will buy back its own shares at 400 yuan each from 300 yuan from the open market.

Zhejiang Ronnie Precision Machine, which makes machinery parts, surged 52.7 per cent to 4.90 yuan in Beijing, the sole market debutant on Thursday. In Asia-Pacific markets, stocks were mixed as the benchmark gained in Japan and fell in Australia and South Korea.

Author: Ann Cao, SCMP

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