August 16, 2022

Hong Kong Index Falls As Tech Stocks Suffer

There was a 2% drop in Hong Kong’s Hang Seng Index due to a decline in tech stocks and there was a more than 1% drop in mainland China markets after the GDP data fell short of expectations.

Markets take a hit

There was a 2.19% decline in the Hang Seng index that saw it close at 20,297.72 and there was also a 3.22% fall in the Hong Kong Tech index. The US listed shares of Alibaba also recorded a more than 4% drop overnight, after reports that authorities had summoned the company’s executives for investigating data theft.

The end of Hong Kong’s trading session saw the shares of the tech giant shed 5.98%. There was also a decline of 1.81% and 2.99% in index heavyweights Meituan and Tencent, respectively. On Thursday, real estate and bank stocks took a hit in China, with homebuyers boycotting mortgage payments for incomplete property projects.

Reports late on Thursday showed that the boycott has expanded. On Friday, there was a 6.2% and 3.9% drop in stocks of Longfor and China Overseas Land and Investment, respectively.

China’s economic data

There was a 0.4% growth in China’s gross domestic product (GDP) in the second quarter, as opposed to the 4.8% growth it had recorded in the first quarter. Predictions had been about 1% growth, so it turned out to be below expectations.

However, retail sales data turned out to be better than expectations, as they recorded a 3.1% increase in June, while no growth had been expected in this number. There was also a drop in mainland Chinese markets.

A 1.64% drop was recorded in the Shanghai Composite, which closed at 3,228.06, while a 1.52% fall was seen in the Shenzhen Component to close at 12,411. The second quarter GDP report in China is the weakest it has been since the first quarter of 2020, when the economy took a hit due to the coronavirus pandemic.

Market analysts said that considering the disruptions that had been seen in consumption and logistics in China due to COVID lockdowns, the data did not really turn out to be very surprising. Nonetheless, they said that the weak data showed that recovery had not been as strong as expectations.

Mixed Asia-Pacific markets

There was a 0.68% drop in the Australian S&P/ASX 200, as it closed at 6,605.6. The Kospi index in South Korea was also struggling for direction and climbed 0.37% higher to end the day at 2,330.98. Meanwhile, there was a 0.48% loss in the Kosdaq, which brought it down to 762.39.

There was a 0.54% increase in Japan’s Nikkei index, so it ended the day at 26,788.47. As for the Topix index, it fell slightly to close the day at 1,892.5. There was an 8.7% increase in shares of Fast Retailing after the company’s quarterly profit hit a record.

There was also a 0.67% drop in the MSCI’s index of Asia-Pacific shares not including Japan. Most major indexes in the Asia-Pacific markets were trading lower this week.

Leave a Reply

Your email address will not be published.