Chinese technology stocks listed in Hong Kong experienced a significant slump on Thursday, with their losses from an October high reaching 20%. The downturn came as investors pulled back amid growing geopolitical tensions and concerns surrounding upcoming earnings reports.
The Hang Seng Tech Index fell as much as 3.6%, with JD.com Inc and Xiaomi Corp being key contributors to the index’s decline. This weakness in the tech sector also impacted the broader benchmark of Chinese stocks listed in Hong Kong, which dropped more than 2%.
The renewed selling pressure on Chinese stocks coincides with the growing uncertainty surrounding US President-elect Donald Trump’s cabinet appointments. With figures critical of Beijing set to take prominent positions, fears have risen that Sino-American tensions could escalate under the incoming administration.
Additionally, market caution has been growing ahead of earnings announcements from major companies like Alibaba Group Holding Ltd and JD.com Inc, both due this week.
“Investors are reducing their risk exposure ahead of earnings, coupled with concerns over Trump and profit-taking from the stimulus-driven rally,” said Vey-Sern Ling, managing director at Union Bancaire Privee.
Meanwhile, Tencent Holdings Ltd saw its earlier 2.8% gain Thursday trim significantly, despite reporting a better-than-expected 47% surge in profit for the September quarter.
Bloomberg
