Alibaba and NIO Extend Drop: Hong Kong Stocks Rebound Slightly

South China Morning Post2023-04-26

  • Hang Seng holds near the lowest level since March 28 as fund managers express frustration with recovery, earnings momentum and potential policy errors

  • Tencent struggles as major shareholder Prosus continues to trim its stake to help fund its own buyback in Amsterdam

People walk past a screen displaying the Hang Seng Index in Central, Hong Kong in October 2022. Photo: ReutersPeople walk past a screen displaying the Hang Seng Index in Central, Hong Kong in October 2022. Photo: Reuters

Hong Kong stocks wavered near a four-week low, with the market unconvinced by the strength of China’s economic recovery, earnings momentum and policy stimulus. Tencent Holdings struggled as a key investor further trimmed stake.

The Hang Seng Index rose 0.4 per cent to 19,704.43 at 10.53am local time, after slipping on Tuesday to the lowest level since March 28. The Tech Index rose 0.9% while the Shanghai Composite Index retreated 0.3 per cent.

Alibaba Group declined 0.8 per cent to HK$83.45 while NetEase slumped 2.4 per cent to HK$135.20 and NIO lost 0.3 per cent to HK$46.00. HSBC weakened 0.3 per cent to HK$55.35. Tencent fell as much as 0.9 per cent before erasing the drop, after Amsterdam-listed Prosus cut its stake to below 26 per cent on Tuesday.

Fund managers in Europe are frustrated with China’s stock markets as performance and earnings lagged bullish expectations amid growth upgrades, according to strategists at Bank of America. Those in Hong Kong fret about business confidence and potential policy missteps.

The city’s benchmark index has dropped 3.3 per cent in April, a pace that could push the market to its worst month since a 9.4 per cent pullback in February. Since the market peaked this year on January 27, the index has tumbled about 14 per cent and its 76 members have lost HK$3.3 trillion (US$430 billion) in market capitalisation.

Meanwhile, bourse operator Hong Kong Exchanges and Clearing climbed 0.3 per cent to HK$326.00 while Ping An Insurance added 0.9 per cent to HK$51.90. Both are due to release their first-quarter report cards later today.

Major Asian markets traded lower, following steep losses in overnight US equities. The Nikkei 225 in Japan fell 0.5 per cent while the S&P/ASX 200 in Australia declined 0.03 per cent and the Kospi in South Korea was little changed.

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