Alibaba, Tencent plunge as Hang Seng sinks below 16,000-mark after China’s leadership reshuffle leaves no market reformists on board

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Xi Jinping consolidated his power in the Communist Party with a third five-year term, while naming key allies to the seven-member Politburo Standing Committee

The Chinese leader also called for ‘regulating the mechanism of wealth accumulation’ in reference to private capital and ‘Common Prosperity’ agenda

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Foreign investors sold a record amount of Chinese onshore stocks after the Communist Party’s congress. Photo: AP

Zhang Shidongin Shanghai

Published: 10:20am, 24 Oct 2022Updated: 5:53pm, 24 Oct 2022

Hong Kong’s benchmark stock index sank below 16,000 points for the first time in more than 13 years after President Xi Jinping strengthened his grip on power with key allies and signalled no let-up in the scrutiny of private businesses. A mixture of conomic reports added to the gloom.

The Hang Seng Index slumped 6.4 per cent to 15,180.69 at the close of Monday trading, the lowest level since April 2009. The index suffered its biggest one-day sell-off since November 2008, marking the third time it has declined more than 1,000 points this year. The Tech Index tanked 9.7 per cent while the Shanghai Composite Index declined 2 per cent.

Alibaba Group plunged 11.4 per cent to a record low of HK$61.65, while Tencent Holdings slid by that much to near a six-year low of HK$206.20. Meituan crashed 14 per cent to HK$121.90. Chinese developer Longfor Group plunged 15 per cent to HK$16.22 and Country Garden Services lost 14 per cent to HK$8.15.

Foreign investors dumped a record 17.9 billion yuan (US$2.5 billion) of onshore stocks via the Stock Connect trading link, according to exchange data.

Xi secured a tradition-breaking third-term as the Communist Party boss after its 20th National Congress over the weekend, and headed a new seven-member Politburo Standing Committee (PSC) with four close allies, naming no apparent successor while sidelining Premier Li Keqiang and central bank governor Yi Gang, among others.