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Hong Kong stock market
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Hong Kong stocks sink 3.7%, worst drop in 15 months as Alibaba, AIA, Longfor lead losses on China’s growth, home prices data

  • Stock benchmark in Hong Kong has lost more than 10 per cent this year, the worst start to a year since 2016; key onshore index is near a five-year low
  • Alibaba, Tencent, HSBC and AIA led market losses on China disappointment, while Longfor paced declines among developers

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Electronic screens showing the Hang Seng Index and other market indicators inside the Connect Hall in Central, Hong Kong on January 5, 2024. Photo: Li Jiaxing
Zhang Shidongin Shanghai
Hong Kong stocks slumped to the lowest in more than 14 months after a government report on growth in China’s economy trailed market consensus and home prices slipped. Fund managers are trimming their allocations on Chinese companies, with policymakers hobbled by inadequate monetary stimulus.

The Hang Seng Index sank 3.7 per cent to 15,276.90 on Wednesday, the lowest since October 2022. Today’s drop is also the steepest one-day pullback in 15 months. The Tech Index tumbled 5 per cent while the Shanghai Composite Index retreated 2.1 per cent.

Alibaba Group fell 4 per cent to HK$65.65 and peer JD.com slipped 6.1 per cent to HK$87.75, while Tencent slid 2.8 per cent to HK$274.60. HSBC led financials lower, losing 2 per cent to HK$57.95, while AIA Group plunged 4.7 per cent to HK$59.60 and ICBC fell 2.5 per cent to HK$3.55.

Longfor Group plummeted 6.8 per cent to HK$8.86, and peer China Resources Land slid 4.3 per cent to HK$23.15 while rival China Overseas Land dropped 6.3 per cent to HK$11.22 after new home prices fell across major mainland Chinese cities.

China’s economy grew at an annual pace of 5.2 per cent last quarter, the statistics bureau said on Wednesday, trailing market consensus of 5.3 per cent. New home prices, excluding state-subsidised housing, fell by 0.45 per cent in December from a month earlier, the most since February 2015, it added.

“Pessimism in China is all but entrenched now,” equity strategists at Bank of America said in the report. “Chronic disappointment has turned investors away from Chinese equities.”

Hong Kong’s stock benchmark has lost more than 10 per cent this year, the worst start to a year since 2016, amid heightened concerns about China’s economic outlook as its stimulus measures failed to drive a stronger recovery, according to BCA Research, a Montreal-based research firm.

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