- Alibaba Group, the owner of this newspaper, beat market estimates in third-quarter report, while job cuts signalled challenges ahead
- Techtronic rebounds after rejecting a short-seller’s attack, without addressing allegations the tools maker inflated its profits
Hong Kong stocks fell deeper into a technical correction following mixed signals in corporate earnings from Chinese big tech companies. Techtronic recovered from a 19 per cent plunge triggered by a short-seller attack.
The Hang Seng Index slipped 1.5 per cent to 20,050.99 at 10.31am local time, the lowest level since January 3, and bringing the decline for the week to 2.9 per cent. The Tech Index retreated 2.3 per cent, while the Shanghai Composite Index weakened 0.6 per cent.
Alibaba Group dropped 3.4 per cent to HK$91.95 after revenue grew 2.1 per cent to 247.76 billion yuan (US$35.9 billion) in the December quarter, while job cuts in 2022 helped trim costs. NetEase slumped 6.5 per cent to HK$130, after its net profit trailed market consensus. Baidu tumbled 3.2 per cent to HK$135.30 and Tencent dropped 1.4 per cent to HK$351.
“The old regime of unlimited expansion and unlimited upside is over” for Chinese internet stocks, Wang Qi, CEO of MegaTrust Investment said in a research note on Thursday. The sector will continue to face earnings uncertainty and massive valuation volatility, he added.
Techtronic advanced 3.6 per cent to HK$77.65 as the Chinese power-tools maker rejected a report by little-known short-seller Jehoshaphat Research that the firm inflated its profits, without addressing the allegations. The stock sank 19 per cent on Thursday, wiping out HK$32.2 billion (US$4.1 billion) of its market value.
The benchmark index was headed for a fourth week of losses, the longest stretch since September. The index’s setback this week brought the cumulative losses to more than 10 per cent since January 27, a technical correction, and erasedUS$366 billion of value from the city’s broader market.
Major Asian markets advanced on Friday. Nikkei 225 in Japan jumped 1.3 per cent, while the Kospi Index in South Korea and the S&P/ASX 200 in Australia both advanced by 0.2 per cent.