Hong Kong stocks slumped towards the worst sell-off in almost four weeks as confidence among investors wanted given China’s limited stimulus to shore up its faltering economic recovery. Nio advanced after a Middle East fund bought a stake in the electric-car maker.
The Hang Seng Index slipped 2 per cent to 19,218.35 at the close of Wednesday trading. The city’s benchmark has lost about 4 per cent this week, the deepest three-day setback since May 29. The Tech Index sank 2.8 per cent while the Shanghai Composite Index declined 1.3 per cent.
Alibaba Group tumbled 4.1 per cent to HK$84.70 while Tencent declined 2.7 per cent to HK$340.40 and Baidu lost 1.7 per cent to HK$140.30. Sportswear brand Li Ning dropped 5.4 per cent to HK$43.95 and peer Anta Sports fell 5.5 per cent to HK$81.45 on concerns about weak consumer spending.
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“Investors expect aggressive stimulus to revive the economy,” Arthur Budaghyan, chief China strategist at BCA Research, said. “However, policy makers will remain behind the growth curve and therefore, investors will be disappointed. The upshot is that Chinese share prices will continue to decline.”
A waning confidence in China’s policy stimulus prompted a fresh round of cutbacks in Chinese growth forecasts by analysts at Wall Street and Japanese brokerages. More than US$86 billion has been erased from the Hang Seng Index’s 76 members this week, while the Tech Index members lost US$51 billion.
Wuxi Biologics fell 2.6 per cent to HK$37.75, adding to a 17 per cent slump on Tuesday, after the biotech firm told selected investors and analysts about weak revenue outlook in the second half during a roadshow.
Limiting losses, Nio jumped 4 per cent to HK$73.35 after CYVN Holdings, a fund backed by the Abu Dhabi government, took a 7 per cent stake in the Chinese EV start-up. The fund will buy 84.7 million new shares for US$738.5 million cash, and pick up another 40.1 million shares from a Tencent affiliate for an undisclosed price.
Two stocks debuted on Wednesday. Jiangxi Guoke Military Industry jumped 16 per cent to 50.68 yuan in Shanghai, while Zhiou Home Furnishing Technology gained 6.8 per cent to 26.34 yuan in Shenzhen.
Major Asian markets were mixed. Australia’s S&P/ASX 200 fell 0.6 per cent, and South Korea’s Kospi lost 0.9 per cent, while Japan’s Nikkei 225 gained 0.6 per cent.
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