China stock bulls retreat as Beijing offers a targeted stimulus to shore up the nation’s faltering economic recovery
Nio jumps as a Middle East investor agrees to purchase a 7 per cent stake in the Chinese EV start-up
Hong Kong stocks slumped towards the worst sell-off in almost four weeks as confidence among investors waned 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 1.6 per cent to 19,302.10 at 10.33am local time. The city’s benchmark has lost 3.8 per cent this week, set for the deepest three-day setback since May 29. The Tech Index tumbled 1.8 per cent while the Shanghai Composite Index declined 0.2 per cent.
Alibaba Group tumbled 3.1 per cent to HK$85.60 while Tencent declined 2.4 per cent to HK$3451.60 and Baidu lost 1.6 per cent to HK$140.40. Sportswear brand Li Ning dropped 1.8 per cent to HK$45.60 and peer Anta Sports fell 2.7 per cent to HK$83.85 on concerns about weak consumer spending.
“China’s slower-than-expected recovery will lead to uncertainties for both onshore and Hong Kong markets, adding [downside] pressure in the third quarter,” Dang Chongyu, an analyst with Sealand Securities, said in a note to clients on Wednesday.
Local stocks were headed for the worst slide in almost four weeks as confidence in China’s policy stimulus waned, prompting another bout of cutbacks in growth forecasts by China analysts at Wall Street and Japanese brokerages. More than US$61 billion has been erased from Hang Seng Index’s 76 members, while the Tech Index members lost US$51 billion in this week’s sell-off.
Wuxi Biologics fell 0.6 per cent to HK$38.50, 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 4.9 per cent to HK$74 after CYVN Holdings, a fund backed by the Abu Dhabi government, took a 7 per cent stake in the Chinese EV start-up. CYVN Holdings will buy 84.7 million new shares for US$738.5 million cash, and separately buy another 40.1 million shares from a Tencent affiliate for an undisclosed price, according to a stock exchange filing on late Tuesday.
Two stocks debuted on Wednesday. Jiangxi Guoke Military Industry jumped 17.5 per cent to 51.30 yuan in Shanghai while Zhiou Home Furnishing Technology gained 6.7 per cent to 26.27 yuan in Shenzhen.
Major Asian markets were mixed on Wednesday. Australia’s S&P/ASX 200 added 0.2 per cent. South Korea’s Kospi lost 0.5 per cent, while Japan’s Nikkei 225 gained less than 0.1 per cent.
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