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Baidu, Tencent, and Meituan put Hong Kong stocks on track for weekly drop after Alibaba reports

Hong Kong equities slumped as Alibaba's disappointing sales growth for the quarter disappointed investors, fuelling fears that China's post-Covid rebound is losing steam.

Baidu, Tencent, and Meituan put Hong Kong stocks on track for weekly drop after Alibaba reports

The Hang Seng Index fell 1% to 19,538.60 at the noon trading break, putting it on track for a second week of losses. The Tech Index fell 1.8%, while the Shanghai Composite Index increased 0.2%.


Alibaba Group Holding down 5.1 percent to HK$83.30, Baidu fell 3.4 percent to HK$121.30, while Tencent Holdings fell 1% to HK$334. Meituan dropped 3.4% to HK$128.90. According to Bloomberg, the Chinese delivery behemoth is likely to begin in Hong Kong as early as next Monday, citing sources.


Geely Auto dropped 0.5% to HK$9.41. The automaker said on Thursday that it has purchased a 17% share in Aston Martin, a British sports car manufacturer. Nio fell 1.3 percent to HK$62.20, while Xpeng fell 1.8 percent to HK$35.60.


Alibaba reported a 2% increase in fourth-quarter sales to 208.2 billion yuan (US$30.3 billion), falling short of analyst expectations of 209.2 billion yuan. The corporation has approved a full spin-off of its business units, beginning with Cloud Intelligence Group, which will be publicly traded within the next year, according to chairman and CEO Daniel Zhang Yong.



“Alibaba’s financial result does not offer too much surprise as it broadly reflects China’s reopening [losing traction],” said Gary Ng, a senior economist at Natixis in Hong Kong. “It is at the core of the market concerns right now.”


Whether Alibaba can restructure successfully and finally list its units will be important for market sentiment in China’s tech sector, he added.


He noted that whether Alibaba can effectively restructure and list its units will be vital for market sentiment in China's tech sector.


According to Goldman Sachs, while China's fiscal revenue growth accelerated in April, factors such as rising government debt levels and falling return on capital would limit the government's ability to implement more pro-growth fiscal policies.


Three companies started doing business in China. In Shanghai, semiconductor firm Skyverse Technology increased 186% to 67 yuan, while medical-equipment maker Hangzhou AGS MedTech decreased 3% to 121 yuan. Shijihengtong Technology, a telecommunications service provider, increased by 69% to 44 yuan in Shenzhen.


The major Asian markets are trading higher. The Nikkei 225 in Japan gained 0.6%, the S&P/ASX 200 in Australia gained 0.6%, and the Kospi in South Korea gained 0.7%.

By fLEXI tEAM


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