Hong Kong's three major stock indices closed the morning session mixed on October 29. As of midday, the Hang Seng Index rose 0.05% to 23,106.71, the Hang Seng Tech Index fell 1.98%, and the China Enterprises Index gained 0.3%.
On the board, internet stocks declined broadly, with Lenovo Group Ltd dropping over 6% and Bilibili Inc falling more than 3%. Mainland bank shares strengthened, with Industrial and Commercial Bank of China Ltd rising over 2%. The optical communication sector weakened, with Zhongji Innolight Co Ltd dropping more than 8%. Memory concept stocks led the declines, with the Southern Dual-Listed Samsung Electronics ETF falling over 10%.
Mainland Bank Shares Strengthen
Industrial and Commercial Bank of China Ltd rose over 2%. Recently, the third-quarter earnings reports of listed banks have begun to be disclosed. Ping An Bank Co Ltd was the first to release its results, reporting operating revenue of 103.1 billion yuan for the first three quarters, up 2.4% year-on-year, and net profit attributable to shareholders of 39.186 billion yuan, up 2.2% year-on-year. Bank of Qingdao Co Ltd released its third-quarter report on October 28, reporting operating revenue of 12.665 billion yuan for the first three quarters, up 15.00% year-on-year, and net profit attributable to shareholders of 4.617 billion yuan, up 15.67% year-on-year, maintaining double-digit growth for 15 consecutive reporting periods.
Optical Communication Sector Weakens
Zhongji Innolight Co Ltd dropped more than 8%. Google's parent company Alphabet Inc released earnings with both third-quarter revenue and profit falling short of expectations. In the third quarter, Alphabet's capital expenditure was 51.4 billion US dollars, below the market expectation of 55.8 billion US dollars. Even with restrained capital spending, the company's free cash flow remained negative at 9.1 billion US dollars, marking the second consecutive quarter of negative free cash flow, while the market had previously expected negative 3.5 billion US dollars. Additionally, Alphabet's borrowing scale climbed sharply in the third quarter, with long-term debt rising from 21.6 billion US dollars a year ago to 125.1 billion US dollars, an increase of approximately 479%.
Memory Concept Stocks Lead Declines
The Southern Dual-Listed Samsung Electronics ETF fell over 10%. Following a downgrade in September this year, UBS once again lowered its 12-month target for the South Korean stock market, cutting the KOSPI target from 8,000 points by 6% to 7,500 points, corresponding to a forward price-to-earnings ratio of 6 times. According to trading desk reports, UBS noted in its October 29 report that the core drivers of this downgrade are exchange rate movements and bottom-up earnings revisions, with increasing macroeconomic pressures set to drag down earnings per share, while the current stock market has not fully reflected the full impact of the Korean won's appreciation.
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