Hong Kong stocks slip, Tech index hits lowest since November 2022, as traders brace for weak China reports

Hong Kong stocks slip, Tech index hits lowest since November 2022, as traders brace for weak China reports

Hong Kong stocks slip, Tech index hits lowest since November 2022, as traders brace for weak China reports

Hong Kong stocks extended losses, compounding the local market’s worst start to a year since 2005, as traders braced for more reports signalling a slowdown in the Chinese economy.

The Hang Seng Index fell 0.9 per cent to 16,385.72 at 9.55am local time. The benchmark tumbled 3 per cent last week, the weakest opening week in 19 years. The Tech Index dropped 2.4 per cent to the lowest level since late November 2022, while the Shanghai Composite Index slipped 0.8 per cent.

Alibaba Group fell 0.8 per cent to HK$71.10 and e-commerce peer JD.com slipped 2 per cent to HK$103.20 and NetEase retreated 2.8 per cent to HK$142. EV maker Li Auto dropped 1.9 per cent to HK$132.30 and Meituan weakened 0.5 per cent to HK$76.60.

China’s economy continued to struggle through the end of last year as deflation persisted. Consumer prices probably dropped 0.4 per cent in December from a year earlier, after a 0.5 per cent fall in November, according to forecasts before an official report on January 12. Imports and exports growth likely slowed, according to Goldman Sachs.

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“The significant pullback in the first week of the year has dented the sentiment,” Kevin Liu, a strategist at CICC Research, said in a report on Sunday. “Further policy support is still the key to reversing the current situation in the Hong Kong stock market. Otherwise even if the US Federal Reserve cuts interest rates, any rebound is likely to be short-lived.”

The Hang Seng Index’s struggle last week defied bullish views by some investors, including HSBC and a Singapore-based hedge fund manager, after the market stabilised in December to stem four successive months of losses.

Foreign funds were net sellers of 5.5 billion yuan (US$770 million) of mainland stocks last week, adding to a sell-off over the past five straight months.

Major Asian equity markets traded higher. South Korea’s Kospi and Japan’s Nikkei 225 both gained 0.3 per cent, while Australia’s S&P/ASX 200 added 0.1 per cent.

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