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Hong Kong stock market
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Hong Kong stock slide as WuXi Bio, Lenovo sink while Moody’s lowers China rating outlook

  • Hang Seng Index slumped to a new 13-month low as slowdown dimmed companies’ earnings outlook, Moody’s cut China’s rating outlook to negative
  • WuXi Biologics tumbled 8.5 per cent after analysts cut their earnings and recommendations; Lenovo crashed on corporate insider selling

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People walking past a stock screen inside an underground mall in Hong Kong on December 5, 2023. Photo: Li Jaixing
Zhang Shidongin Shanghai
Hong Kong stocks dropped for a third day, deepening losses at a 13-month low as China’s slowdown weighed on earnings outlook. WuXi Biologics slumped further after some analysts cut their recommendation. Moody’s lowered China’s rating outlook to negative.
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The Hang Seng Index tumbled 1.9 per cent to 16,327.86 on Tuesday, the lowest level since November 10 last year. The Tech Index dropped 2.1 per cent while the Shanghai Composite Index retreated 1.7 per cent to close below the 3,000-point mark for the first time in five weeks.

WuXi Biologics sank 8.5 per cent to HK$30.35, adding to a 24 per cent plunge on Monday that triggered a trading halt and erased HK$44 billion (US$5.62 billion) in market capitalisation. Analysts at Nomura, Daiwa, BoCom, CLSA and Citigroup cut their earnings forecasts or downgraded their recommendations to reflect the souring prospects.

PC maker Lenovo Group tumbled 11 per cent to HK$8.87 after chairman Yang Yuanqing sold 6 million shares, a filing showed. Bourse operator Hong Kong Exchanges and Clearing slid 5.5 per cent to HK$253.60, Tencent lost 2.5 per cent to HK$308.80 while Alibaba Group slipped 0.4 per cent to HK$70.50. Zijin Mining lost 3.3 per cent to HK$12.18 after gold prices fell from a record.

Losses accelerated after Moody’s lowered China’s rating outlook to negative from stable, citing economic slowdown risks due to cash-strapped local governments and state-owned enterprises, and a weak property market. The finance ministry in Beijing said it was disappointed, as measures have been taken to contain the fallout.

“Sentiment has worsened after China’s economy has shown signs of a weak recovery and some of the big companies tumbled after their recent quarterly results,” said Shen Fanchao, an analyst at Zheshang International. “We remain cautious about Hong Kong stocks in the near term.”

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