Hong Kong stocks weakened for a second day after China’s central bank warned about inflation risk, stoking concerns that policymakers will temper its stimulus measures. Tencent Holdings slid after its earnings report signalled weakness in the broader sector.
The Hang Seng Index fell 1.8 per cent to 17,931.06 as of 9.47am local time, set for the biggest drop this month. The Tech Index declined 3.7 per cent while the Shanghai Composite Index lost 0.6 per cent.
Tencent lost 0.5 per cent to HK$292.80 after the WeChat operator said revenue fell in the third quarter and net income climbed 1 per cent. Alibaba Group, which reports later today, dropped 3.2 per cent to HK$76.30. Meituan plunged 5.4 per cent to HK$153.60 on stock overhang worries, after Tencent decided to give away US$20.3 billion of its stake in the food-delivery platform as dividend to shareholders.
Baidu, NetEase and Alibaba Health Information all tumbled by more than 5 per cent, as Tencent’s report card unmasked weak sales and profitability following months of sector clampdown while Beijing pushed the “common prosperity” agenda.
The People’s Bank of China said that it “will pay serious attention to the underlying possibility of rising inflation, especially changes in the demand side” in its quarterly report released on Wednesday.