Hong Kong stock market faces headwinds amid tech sector slump

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27th February 2024 – (Hong Kong) The Hang Seng Index struggled to maintain its initial gains, ultimately succumbing to a downward pressure that saw it drop by 170 points to rest at the 16,400 level. Despite the opening bell bringing a modest uptick of 10 points, the overall sentiment remained bearish, with the Hang Seng Index settling at 16,574.21, a decline of 0.36% or 60.53 points as of 12.05pm.

State-owned enterprises weren’t spared the market’s capricious mood, with the relevant index shedding 50 points. The technology index, often a bellwether for market confidence, also retracted by 20 points amidst a total turnover of 350 billion Hong Kong dollars on the main board.

Leading the descent were the heavyweight tech stocks, which underperformed significantly. Ctrip.com retreated by 4.5%, while Meituan saw a decrease of 4.2%. JD.com, another e-commerce giant, dwindled by 3%, and Tencent Holdings, a conglomerate with substantial influence over the digital landscape, fell by 2.8%. Search engine leader Baidu wasn’t left untouched either, diminishing by 2.1%, with NetEase and Xiaomi Group also registering drops of 1.6% and 1.5% respectively. Alibaba Group, the renowned e-commerce behemoth, saw its shares dip by 1%.

Financial stocks demonstrated a weaker performance, with Hong Kong Exchanges and Clearing Ltd. leading the losses at 2.7%. China Merchants Bank’s shares decreased by 1.6%, with AIA Group following closely at a 1.5% reduction. China’s insurance and banking sectors felt the tremors as well, with China Life Insurance Co. falling by 1.3%, HSBC Holdings by 0.5%, Bank of China by 0.3%, and Industrial and Commercial Bank of China by 0.2%. China Construction Bank managed to hold its ground amidst the downturn.

In stark contrast to the general market downtrend, Li Auto Inc. emerged as the beacon of success, soaring an impressive 18.7% on the back of commendable financial results, making it the top-performing blue-chip stock of the day. The automotive sector experienced mixed fortunes; BYD Co. Ltd. enjoyed a rise of 1.9%, NIO Inc. edged up by 1.8%, and XPeng Inc. by 1%. Meanwhile, Geely Automobile Holdings, Great Wall Motor Co., Dongfeng Motor Group, and Guangzhou Automobile Group suffered minor losses ranging from 0.3% to 0.7%.

Other major blue-chip stocks experienced volatility, with Mengniu Dairy facing the sharpest decline at 9.1%. It was closely followed by China Resources Mixc Lifestyle Services Co. with a 4% drop. Conversely, CLP Holdings Ltd. attracted a wave of buying, pushing its shares up by 3.5%.