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Hong Kong stocks weaken as mass Covid-19 testing reignites China lockdown fears while Alibaba gains on price upgrades
- Investors on edge as mass Covid-19 screening in nine out of Shanghai’s 16 districts begins following new infections
- Alibaba Group advances after Daiwa, JPMorgan and Nomura raised their price targets for its Hong Kong and US-listed shares
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Hong Kong stocks approached a two-week low as a resurgence in Covid-19 cases in mainland China led to a mass testing process and undermined bets for a swift economic recovery. Alibaba Group advanced as analysts raised their price targets.
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The Hang Seng Index fell 1.2 per cent to 21,586.66 at the close, the lowest level since June 23. The Hang Seng Tech Index retreated 1.2 per cent, while the Shanghai Composite Index lost 1.4 per cent.
Shanghai has started mass Covid-19 screening in nine of the 16 districts in the financial hub after the city of 25 million reported new infections over the past few days. The mass testing this week is stoking jitters after the economic toll from a two-month citywide lockdown in April and May.
Chinese pork processor WH Group tumbled 4 per cent to HK$5.81 after the nation’s planning body said that it will crack down on any speculative practices that ramp up pork prices. Oil producers PetroChina and CNOOC dropped more than 4 per cent after crude-oil futures tumbled overnight on recession concerns.
China is still in the process of transitioning to a new development paradigm and “facing uncertain development in pandemic control,” said Redmond Wong, a strategist at Saxo Markets. “Long-term investors should be patient in accumulating positions.”
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