HSI declines amid China Covid fears

Hong Kong stocks declined yesterday with the Hang Seng Index once plunging more than 600 points amid worries that China will step up Covid restrictions, while tech shares retreated after last week's results announcements.

The benchmark HSI closed at 17,655.9, down by 1.87 percent or 336.63 points. Technology and restaurant shares fell. JD.com (9618), Meituan (3690) and Alibaba (9988) all fell by about 5 percent, while hot pot chain Haidilao International (6862) and Xiabuxiabu Catering (0520) plunged by 7.1 percent and 6.6 percent respectively.

However, new blue-chip entrants Tingyi Holding (0322) and China Resources Mixc Lifestyle Services (1209) rose by 2.91 percent and 1.03 percent to HK$12.04 and HK$34.35 respectively.

Both JD Health (6618) and Alibaba Health (0241) fell by about 4 percent to HK$64.1 and HK$5.63 respectively, amid news that oral Covid medications has to be prescribed by hospitals.

Also, JD Health reported an operating income of 77.23 million yuan for the third quarter, from an operating loss of 556.39 million yuan for the same period last year.

UBS said the investment environment should improve next year with slower inflation and forecast 4 percent growth in Asia.

Citi hiked its rating for the HSI to "overweight" while Grow Investment chief economist Hong Hao said he expects the HSI to move between 16,000 and 23,000 points, representing a potential rise of up to 30 percent.

In other news, the onshore yuan weakened to a two-week low of 7.1708 yuan per US dollar.