- Local stocks are headed for a second losing week, as mixed recovery signals in China cloud earnings outlook
- The US is said to be mulling new rules to prevent US investment in Chinese tech companies, The New York Times reported, days after the ‘spy balloon’ incident
Hong Kong stocks retreated as mixed signs of recovery in China cloud earnings prospects, while rising geopolitical tensions stoked concerns about new tech sanctions on Chinese companies, sapping appetite for riskier assets.
The Hang Seng Index fell 1.6 per cent to 21,282.30 as of 11.00 am local time, bringing the drop so far this week to about 1 per cent. The Tech Index tumbled 3.7 per cent, while the Shanghai Composite Index weakened 0.2 per cent.
Alibaba Group slipped 2.9 per cent to HK$104.50, Baidu dropped 5.9 per cent to HK$142.70 while JD.com tumbled 5.5 per cent to HK$212.20. BYD lost 3.3 per cent to HK$241.20 as Berkshire Hathaway further cut its stake, while China’s biggest chip maker SMIC slipped 3.9 per cent to HK$17.32 following an earnings setback.
Mainland Chinese investors were net sellers of HK$2.45 billion (US$311 million) worth of Hong Kong-listed stocks this week through Thursday, taking the outflows this year to HK$6.4 billion, according to Stock Connect data.
Equities in Hong Kong are struggling as a rally from late October lost momentum after the Lunar New Year holiday. The Hang Seng Index is headed for a second losing week, taking the pullback to more than 5 per cent since the benchmark peaked on January 27.
“Investor sentiment edged down” due to mixed economic data and geopolitical uncertainties, Morgan Stanley analyst Laura Wang said in a note on Thursday. China’s recovery remains on track, although “some interim volatilities” should be expected, she added.
The Biden administration is said to be mulling new rules that would curb US investment in Chinese technology companies, The New York Times reported, days after the US government shot down a Chinese-owned “spy balloon” over its airspace.
Meanwhile, consumer prices in China rose last month by 2.1 per cent from a year earlier, versus 1.8 per cent in December, the government data said on Friday, limiting the room for monetary easing. Producer prices index fell 0.8 per cent, suggesting manufacturers struggled to pass on costs to consumers.
Elsewhere, chip maker Motorcomm Electronic Technology surged 182 per cent to 260 yuan on the first day of trading in Shanghai.
Asian stocks were mixed on Friday. The Kospi in South Korea lost 0.8 per cent and the S&P ASX 200 index in Australia dropped 0.6 per cent, while the Nikkei 225 index in Japan advanced 0.7 per cent.