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Hong Kong stock market
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Chinese tech stock sell-off reaches US$527 billion as Alibaba slips, market rebound bypasses troubled sector

  • Alibaba slipped after first quarterly loss since 2012 as tech stocks lost US$527 billion from February 17 high
  • Hang Seng Index pared a third weekly loss as US jobless claims report tempered concerns about inflation outlook

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A man passes under the large screen showing the latest stock market data in Shanghai on May 10. Photo: EPA-EFE
Zhang Shidongin Shanghai
Alibaba Group Holding fell, deepening a rout on Chinese technology stocks, on concerns about its hefty investment plan as some analysts lowered price targets. The slide eclipsed a slight rebound in the broader Hong Kong market after a resilient US labour market report.
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The e-commerce group and owner of this newspaper sank 4 per cent to the lowest in almost a year. Citigroup and China International Capital Corp cut their price targets by at least 9 per cent, saying its plan to reinvest profits to fend off competitions will cast uncertainty over margins. Citic Securities estimates net income to drop 2 per cent in 2022.

The Hang Seng Tech Index slipped 0.5 per cent, taking the gauge of China’s biggest technology stocks to the lowest level since mid-November, lopping US$527 billion of market value off its members from the peak on February 17.
Higher commodity prices, faster US inflation and tightening regulations and liquidity in China have combined to undermine confidence among investors this week. The MSCI Asia Pacific Index, the broadest gauge of regional equities, surrendered this year’s gain on Thursday. Some US$2.55 trillion in value was erased since the index peaked in mid-February.

In Friday’s trading, the Hang Seng Index rose alongside with other major markets in the Asia-Pacific region, rising 1.1 per cent to 28,027.57 from a four-month low. The rebound narrowed the losses this week to 2 per cent and marked a third straight weekly decline. In mainland China, the Shanghai Composite Index rose 1.8 per cent on Friday, adding to a 2.1 per cent advance for the five-day period.

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Traders were given a respite from smaller jobless claims in the US, as a sustained recovery in the labour market allayed concerns over inflation and rising bond yields.
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