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Hong Kong stock market
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Ping An, Meituan, Geely drag Hang Seng to 3-month low as poor earnings outlook, recession fears overcome China bets

  • US equities slipped overnight by the most since mid-June on Fed policy concerns, hurting risk appetite in Asian markets
  • Reported earnings from Hang Seng Index companies have so far trailed market consensus by 11 per cent, according to Refinitiv data

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Investors talking about markets inside a brokerage in Anhui province in February 2022. Photo: Reuters
Cheryl Heng
Hong Kong stocks slumped to the lowest level in more than three months, tracking overnight losses in US equities, while markets struggled with uninspiring domestic corporate earnings.
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The Hang Seng Index fell 0.8 per cent to 19,503.25 at the close of Tuesday trading, a level not seen since May 12. The Tech Index retreated 0.3 per cent while the Shanghai Composite Index slipped less than 0.1 per cent.

Companies slated to report their earnings on Tuesday weakened, with Ping An Insurance dropping 1.3 per cent to HK$42.95 and Henderson Land retreating 1.6 per cent to HK$27.25. Meituan fell 1.4 per cent to HK$168.70 while Geely Automobile sank 6.3 per cent to HK$16.16.

About 40 per cent of the Hang Seng Index members have reported earnings so far, missing analysts’ estimates by 11 per cent, according to Refinitiv data. Some 28 per cent of all Chinese listed stocks have reported their interim results through August 19, falling 1 per cent from a year earlier, according to Goldman Sachs.

“We believe the upside in China and Hong Kong stock markets is limited in the short term, due to the overhang in China’s property market,” said Daniel So, analyst at CMB International. A resurgence in Covid-19 cases and poor US-China ties are also hurting the market, he added.

Three cuts to key lending rates in China this year, including the latest this week, have failed to spark buying interest, as some money managers called for a strong dose of stimulus to recharge the economy hobbled by a housing market crisis. China’s biggest onshore stocks in the CSI 300 Index have lost 15.4 per cent this year despite various efforts to reflate the economy.
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