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Hong Kong stocks at 11-year low as China sticks to zero-COVID plan
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People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China, on July 19, 2022.
(Reuters/Lam Yik)
H
ong Kong's stock benchmark on Tuesday fell below 17,000 points for the first time in 11 years, after China vowed to stick to its zero-COVID policy, adding to slowdown concerns amid heightened US tech crackdowns and aggressive overseas rate hikes.
China stocks, meanwhile, edged up after a four-session losing streak, lifted by new energy shares as industry players expect robust Q3 earnings.
The Hang Seng Index lost 1.6 percent, breaching the key 17,000 mark for the first time since Oct. 4, 2011, and the Hang Seng China Enterprises Index declined 1.9 percent by the end of the morning session.
The blue-chip CSI 300 Index rose 0.5 percent, while the Shanghai Composite Index added 0.4 percent.
Other Asian stock markets fell and the dollar rose, with investors worried about rising interest rates and an escalation in the Ukraine war.
Zero-COVID is "sustainable" and China must stick to the policy, the official People's Daily said in a commentary on Tuesday, endorsing the controversial anti-virus measure for the second day in a row.
Chinese authorities have stepped up testing in Shanghai and other megacities as COVID infections rise again, as well as extending quarantine times and closing some public spaces where the virus could spread.
Tech giants listed in Hong Kong tumbled 3 percent, with food-delivery giant Meituan down 6.5 percent to become the biggest drag on the Hang Seng. Video platform Bilibili Inc plunged more than 9 percent.
In China, property developers retreated 2.2 percent, semiconductor makers dropped 1 percent and tourism firms declined 1.9 percent.
Shares in Chinese tech giants and chipmakers slumped on Monday, following new US export control measures aimed at slowing Beijing's technological and military advances.
However, the CSI New Energy Index jumped 3.2 percent, the CSI New Energy Vehicles Index soared 3.4 percent, and the CSI Photovoltaic Industry Index added 2.3 percent.
China's electric vehicle battery industry leader CATL surged 5.3 percent, as it expects net profit in the July-September quarter to nearly triple from a year-ago period.
Recent developments, including a new pilot program that permits foreign-owned travel agencies to conduct outbound tourist businesses in Shanghai, Chongqing and the Beijing Marathon — which will be held on Nov. 6 — are not signs of reopening, Nomura said in a note.
