Hong Kong stocks drop as Alibaba, Evergrande retreat after China signals no imminent stimulus to spur short-term growth
- Hang Seng Index fell from near a six-week high amid China slowdown concerns while China disappointed traders banking on policy easing
- Alibaba weakened 0.9 per cent, halting a big rally this month and Evergrande tumbled on another failure to sell assets to raise cash
The Hang Seng Index fell 0.5 per cent at 26,017.53 on Thursday. The benchmark tech index slipped 0.8 per cent from a five-week high as traders deemed this week’s rally as excessive. Gain in the Shanghai Composite Index narrowed to 0.2 per cent at 3,594.78.
Alibaba, the owner of this newspaper, fell 0.9 per cent to HK$174.30. The stock had surged almost 24 per cent this month through Wednesday on speculation its ties with regulatory authorities were improving. Co-founder Jack Ma made his first overseas trip since authorities foiled his Ant Group’s stock listing plans.
“The worst time for both the Hang Seng and the Tech index had already passed,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators. “But people are still unsure whether there will be more regulations in future.”
The China Banking and Insurance Regulatory Commission said on Thursday that the Evergrande crisis will not hurt the credit of Chinese companies, citing China’s stable growth. Still, China will not stimulate the property market to shore up short-term economic growth, it added.
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Longfor Group surged 7.9 per cent while Country Garden and its property management arm jumped more than 3 per cent. Sunac China Holdings surged 10.1 per cent.
“The Evergrande crisis embodies the delicate balance for authorities between containing leverage in the economy while preserving financial stability,” Rohini Malkani, a senior ratings analyst at DBRS Morningstar, said in a report. “The fallout could have unanticipated effects that spread through the financial system and economy, potentially leading to sharply lower growth prospects over the next few years.”
Elsewhere, Ping An Insurance jumped 7.3 per cent in Hong Kong and 5.7 per cent in Shanghai after net profit grew by about one-third to 11.6 billion yuan (US$1.8 billion) in the third quarter from a year earlier.
Three stocks began trading for the first time in mainland China. Bisen Smart Access soared 86 per cent to 16.88 yuan. Qingdao Foods jumped 44 per cent and Ningbo Dechang Electrical Machinery rose 30 per cent.