Hong Kong stocks fall by most in a week as corporate earnings seen faltering amid China slowdown

Hong Kong stocks dropped by the most in a week amid signs corporate earnings from benchmark index members are trailing market expectations.

The Hang Seng Index fell 1.5 per cent to 17,634.92 as of 10.55am local time, paring the gain for the week to 1.2 per cent. The Tech Index weakened 1.6 per cent while the Shanghai Composite Index retreated 0.4 per cent.

Alibaba Group dropped 1 per cent to HK$76.50 and Tencent lost 1.6 per cent to HK$323.80. Online game operator NetEase slid 3.4 per cent to HK$175.40. EV maker BYD tumbled 2.2 per cent to HK$231.60, while Meituan slipped 2.3 per cent to HK$109.60 before its quarterly report card next week.

Some 31 of 80 Hang Seng Index members have released their earnings reports for the September quarter, generating an average 6.5 per cent growth from a year earlier, according to Bloomberg data. The outcome has so far surprised by 7.2 per cent to the downside, with material producers, technology company and banks being the biggest culprits.

Chow Tai Fook tumbled 9 per cent to HK$10.98 after the billionaire Cheng family that controls the city’s top jewellery retailer quashed speculation about an internal rift and succession issues. The firm reported a better-than-expected 36 per cent jump in earnings last quarter, while revenue missed market consensus.

New World Development, the family’s flagship property developer, slipped 0.6 per cent to HK$13.24. The stock tumbled 4.4 per cent on Thursday, after it traded without entitlement to a special dividend payout.

Stocks are still set for a weekly advance from gains earlier in the week, after investors bet improving US-China ties will dial down geopolitical tensions. Mainland Chinese authorities, including those in Shenzhen, have also unveiled steps to help arrest a slump in the housing market.

Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 0.9 per cent and Australia’s S&P/ASX 200 added 0.4 per cent, while South Korea’s Kospi retreated 0.1 per cent.