GELYF - Hong Kong shares remain under pressure amid deepening concern over the outlook for the US-China tech rivalry

2023-03-10 01:28:06 ET

Hong Kong stocks is leading the pack in Asia market, continuing its downward trend for the fourth day and erasing its advance for the year, pressured by an overnight slump on Wall Street due to worries of prolonged high-interest rates in the US ahead of February jobs data later today, and deepening concern over the outlook for China’s technology sector amid a lack of catalysts from the recent legislative session in Beijing.

Today major Asian markets fell with the Hang Seng i ndex in Hong Kong fell 2.6% to near 11-week lows of 19,433, leading losses in the region. In mainland China, the Shenzhen Component shed 1.1% and the Shanghai Composite fell 1.2% as China’s Xi Jinping formally secured an unprecedented third term as president.

All sectors dragged down the index, JD.Com ( JD ) plummeted around 11% after weaker-than-expected revenue guidance. BYD ( OTCPK:BYDDF ) also saw a sharp fall -8%, alongside Baidu ( BIDU ) -6.4%, Geely Auto ( OTCPK:GELYF ) -6%, Alibaba Group ( BABA ) -3.7%.

Last week, The Biden administration had blocked tech exports to another 28 Chinese companies .

"Economic warfare" will almost certainly continue and the risk of significant escalation cannot be ruled out," Yan Wang, chief China strategist at Montreal-based Alpine Macro, said in a report on Tuesday, singling out the tensions as a possible negative surprise.

Additionally, investors are now looking ahead to a key employment report due out on Friday that could further determine the direction on the Federal Reserve’s rate hikes ahead.

Earlier this week, The London Metal Exchange, a unit of Hong Kong Exchanges and Clearing Limited, has been hit by another lawsuit by global hedge funds and commodity traders , a year after a nickel squeeze sparked wild prices and prompted the bourse to cancel trading contracts.

Overnight in the U.S., major US stock indices are closing sharply lower. Selloff in financials sends Dow, Nasdaq, S&P 500 sharply lower .

On Thursday, China reported lowest inflation rate in a year as consumers wary despite a removal of zero-COVID policy .

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