Hong Kong stocks fell, with the benchmark flipping to a weekly loss, as disappointing results from Baidu and downbeat guidance from PDD Holdings heightened jitters about corporate earnings and China’s growth outlook.
The Hang Seng Index dropped 1.89 per cent to 19,229.97; The Hang Seng Tech Index slid 2.57 per cent to 4,246.2.
Chinese search engine operator Baidu tumbled, the worst performer on the Hang Seng Index after reporting the biggest sales decline in more than two years. Alibaba Group Holding dropped after rival PDD warned of stiffer competition in the e-commerce industry.
A slew of lacklustre results from the Hang Seng Index companies, including Alibaba and Baidu, underscore the weakness in China’s economic recovery and the urgency for policymakers to do more to ramp up growth. Investors have become impatient and opted to exit equity markets after fiscal measures approved by lawmakers this month to sell bonds to tackle the hidden debt crisis at local governments fell short of market expectations.
“Equity markets could be bumpier in 2025 with a deflationary environment, persistent downwards earnings pressure and rising geopolitical concerns,” said Laura Wang, a strategist at Morgan Stanley in Hong Kong.
Baidu tumbled 8.59 per cent to HK$76.65 after third-quarter revenue fell 3 per cent year on year, with decreased advertising sales offsetting the progress in the AI market.
Alibaba fell 4.38 per cent to HK$80.70, taking a cue from an 11 per cent plunge in budget shopping app owner PDD in overnight US trading. PDD’s third-quarter net income fell 22 per cent from the previous three-month period, with company executives forecasting a moderation in revenue growth. Peer JD.com slipped 0.1 per cent to HK$168.80.
Some 36 companies on the Hang Seng Index have disclosed quarterly results so far, posting an average 0.1 per cent profit decline from a year earlier, according to Bloomberg data. In the previous quarter, profit growth was 7.3 per cent.
Separately, the quarterly review of the Hang Seng Index is due to be released later on Friday. The index compiler did not make any change in the last rebalancing.
Shenzhen Uniconn Technology, which makes electrical components, jumped 195 per cent to 214.96 yuan on the first day of trading in Shenzhen.
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