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Hong Kong stock market
BusinessBanking & Finance

Hong Kong stocks slide as Techtronic sinks 19 per cent on short-seller attack while market awaits Alibaba’s report card

  • The Hang Seng Index has lost almost 10 per cent from the January 27 peak, while the broader market suffered a HK$320 billion sell-off during the slump
  • Chances of higher Fed fund rates have risen over the past week for the June policy meeting, according to CME Group data

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A man on a bicycle stands in front of an electronic board showing the stock actions in Shanghai, Tokyo and New York in September 2022. Photo: Reuters
Mia Castagnone
Hong Kong stocks fell into a correction after a short-seller report triggered a sell-off in powertools maker Techtronic. The market earlier rose on expectations stronger corporate earnings from Alibaba Group Holding and other industry leaders will boost sentiment.
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The Hang Seng Index slid 0.4 per cent to 20,351.35 at the close of Thursday trading to the lowest level since January 3. The drop took the index’s decline past 10 per cent from the peak on January 27, a technical pullback. The Tech Index pared a rally to 1.2 per cent, while the Shanghai Composite Index ended with a 0.1 per cent loss.

Techtronic sank 19 per cent to HK$74.95 after little-known Jehoshaphat Research said it shorted the stock, alleging the Hong Kong-based power-tools maker inflated its profits. The stock has a 1.16 per cent weight in the Hang Seng Index. The company has not responded with a stock exchange filing at press time.

Limiting the market decline, Alibaba Group jumped 2.6 per cent to HK$95.40 while NetEase added 4 per cent to HK$138.90. Smartphone maker Xiaomi added 0.2 per cent to HK$12.26 and bourse operator Hong Kong Exchanges and Clearing slid 0.7 per cent to HK$325.20

Elsewhere, HKEX said earnings increased 11 per cent to HK$2.98 billion, a record in the December quarter, beating the market consensus for a 9 per cent gain, as stock trading volume surged and investment income fattened as Beijing’s zero-Covid pivot boosted asset prices.

“With some good corporate earnings results coming out, we are seeing some impact on the Hong Kong stock market,” said Linus Yip, chief strategist at First Shanghai Securities. “2022 was a [forgone] bad year, the key we are looking at is the forecast performance for 2023.”

Alibaba, the owner of this newspaper, will issue its December quarter report card later today, with analysts expecting a 73 per cent jump in earnings. Game developer NetEase and Macau casino operator Galaxy Entertainment are also due to reports on Thursday.

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