(Bloomberg) — Hong Kong stocks declined on the first day of trading for 2022, weighed by weaker sentiment on tech shares and ongoing concerns about the financial health of Chinese developers.
The benchmark Hang Seng Index slid 0.5% as of 11:15 a.m. local time, reversing from an earlier gain of as much as 0.9%. Alibaba Group Holding and Wuxi Biologics Cayman Inc. were among the biggest decliners, with the latter down 7%. Chinese property shares dropped.
“Sentiment is generally still weak for China’s consumer-facing tech companies, not just from the risk of further regulations, but also difficult macro conditions due to fresh Covid-19 outbreaks and weaker consumption,” said Vey-Sern Ling, a senior analyst at Union Bancaire Privee. “Having said that, valuations are depressed and investors may be looking to add positions selectively.”
Liquidity was thin, with average volumes on the benchmark 58% below the 30-day average. A number of regional markets including China and Japan were shut due to the holiday.
The slide extends weakness from last year after Beijing’s regulatory crackdown on everything from property to tech to private tutoring companies sent Hong Kong stocks tumbling. The benchmark gauge was the worst-performing major benchmark globally in 2021.
A BI gauge of China real estate developers fell by as much as 2.6%, the biggest drop in two weeks, led by Shimao Group Holdings Ltd. Shares of closely-watched China Evergrande Group were suspended from trading in Hong Kong on Monday, citing a pending announcement. The halt follows a local media report that the company has been ordered to tear down apartment blocks in a development in Hainan province.
Meanwhile, the Hang Seng Tech Index — comprised of China tech stocks — was down 0.7%, led by shares of Ping An Healthcare and Technology Ltd. and Alibaba Health Information Technology Ltd. Investors remain cautious given uncertainty over the regulatory risk this year.
(An earlier version corrected the spelling of the analyst’s name in the third paragraph)
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