Chinese technology stocks fell as weak corporate profits coupled with dim forecasts of global growth boosted sales.
At the beginning of Thursday, the Hang Seng Tech index fell by 4.8%, the largest weight was gained by Tencent Holdings and Alibaba Group. Tencent fell more than 8% after the tech hippo reported the slowest revenue growth since going public in 2004. Xiaomi was also ahead of earnings announcements later that day.
Thursday’s crash tracks global sales caused by disappointing revenues from U.S. consumers who speculated that an economic downturn might be on the way. As for China’s technology, repeated commitments by senior officials to support the affected sector – the latest from Prime Minister Li Keqiang late Wednesday – lacked the firepower to raise stocks. Tencent executives said it would take time for Beijing’s promises to materialize.
The share of Chinese stocks in the US on Wednesday fell by 2.5%.
Chinese stocks are generally being blocked after fresh Covid-19 outbreaks in key cities. Politicians have shown little sign of abandoning Covid Zero policies, even as the damage to economic growth and business becomes increasingly apparent.
On the mainland, the CSI 300 index fell by more than 1%. The Hong Kong benchmark Hang Seng fell 2.9%. – Jiyeun Lee, (c) 2022 Bloomberg LP