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JD.com, Tencent drag Hong Kong stocks as China slowdown dents earnings, BlackRock cuts view on market outlook
- Alibaba, Tencent, JD.com led losses as Covid-induced lockdowns hit corporate earnings
- Money managers at BlackRock predicted more downside to China economy after downgrading views on local, developed market stocks
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Hong Kong stocks fell for the second day as investors braced for more signs of weaker corporate earnings from tech companies, while China’s Covid-induced slowdown forced more strategists to turn cautious on the economy and equities.
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The Hang Seng Index declined 1.8 per cent to 20,112.10 at the close of Tuesday trading, its first back-to-back losses in two weeks. The Tech Index retreated 3.5 per cent, while the Shanghai Composite Index fell 2.4 per cent.
Alibaba Group Holding slipped 1.8 per cent to HK$83.60 and JD.com slumped 5.3 per cent to HK$201.60. Tencent Holdings dropped 2.6 per cent to HK$338 after Barclays downgraded its US-listed shares, citing stalling growth in key businesses.
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About 70 per cent of the members on the MSCI China Index have reported earnings as of Monday, according to Bloomberg data. The index’s 744 constituents generated 1.4 per cent profit growth on average, with more than half of them trailing consensus estimates.
“We expect China’s deteriorating economic outlook to be a drag on global growth and we think consensus forecasts for China’s 2022 GDP growth are likely to get revised down,” global strategists including Wei Li at BlackRock wrote on Monday.
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