Advertisement
Hong Kong stock market
BusinessChina Business

Alibaba, NetEase slide with Hong Kong stocks in correction on mixed earnings while Techtronic halts sell-off

  • Alibaba Group, the owner of this newspaper, beat market estimates in third-quarter report, while job cuts signalled challenges ahead; NetEase missed consensus
  • Techtronic rebounded after rejecting a short-seller’s attack, without addressing allegations the tools maker inflated its profits

Reading Time:2 minutes
Why you can trust SCMP
2
People walk past a screen displaying the Hang Seng stock index in Central, Hong Kong in October 2022. Photo: Reuters
Jiaxing Li
Hong Kong stocks fell deeper into a technical correction, hitting the lowest level this year, following a mixed bag of earnings from Chinese big tech companies. Techtronic industries recovered from a 19 per cent plunge triggered by a short-seller attack.
Advertisement

The Hang Seng Index slipped 1.7 per cent to 20,010.04 at the close of Friday trading bringing the decline for the week to 3.4 per cent to cap a four-week losing streak. The Tech Index retreated 3.3 per cent, while the Shanghai Composite Index weakened 0.6 per cent.

Alibaba Group dropped 5.4 per cent to HK$90.05 after revenue grew 2.1 per cent to 247.76 billion yuan (US$35.9 billion) in the December quarter, while job cuts in 2022 helped trim costs. NetEase slumped 11.2 per cent to HK$123.50, after its net profit trailed market consensus. Baidu tumbled 6 per cent to HK$131.40 and Tencent dropped 1.9 per cent to HK$349.40.

“The old regime of unlimited expansion and unlimited upside is over” for Chinese internet stocks, Wang Qi, CEO of MegaTrust Investment said in a research note on Thursday. The sector will continue to face earnings uncertainty and massive valuation volatility, he added.

Wang in late January predicted that Hong Kong stocks could suffer a 10 to 18 per cent pullback in the next two months from the peak, as the reopening trade is running out of steam. The index has now lost more than 10 per cent since January 27, a technical correction that erased US$366 billion of value from the city’s broader market.

The rally from late October lost momentum amid US-China geopolitical tensions and corporate earnings headwinds, while US rate concerns persisted. Traders this week raised the odds on higher Fed funds rate for June meeting amid sticky US inflation .

21:41

Hong Kong consumption vouchers have ‘more psychological than real’ impact on boosting spending

Hong Kong consumption vouchers have ‘more psychological than real’ impact on boosting spending
Advertisement