HONG KONG: Chinese and Hong Kong stocks extended their losses on Friday, as market sentiment came under pressure from renewed US-China tech tensions and a disappointing earnings report from Alibaba.
Tech shares lift Hong Kong stocks, earnings in focus
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At the midday break, the Shanghai Composite index was down 0.52% at 3,363.32 points.
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China’s blue-chip CSI300 index was down 0.57%, with its financial sector sub-index lower by 1.31%, the consumer staples sector down 1.04%, the real estate index down 0.61% and the healthcare sub-index down 0.36%.
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In Hong Kong, the Hang Seng Index was down 0.81% at 23,262.80.
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Index heavyweight Alibaba Group lost 5.3% by midday after the e-commerce giant posted quarterly revenue below analysts’ estimates on Thursday.
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On the geopolitical front, the US Commerce Department is considering placing more Chinese companies, including ChangXin Memory (CXMT), on its restricted export list, a person familiar with the matter told Reuters.
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The Bureau of Industry and Security is also looking at adding subsidiaries of Semiconductor Manufacturing International Corporation and Yangtze Memory Technologies Co to the “Entity List”, the source said.
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“Market focus has shifted to the US-China competition on other fields, such as semiconductor and healthcare, after the two countries significantly reduced tariffs for each other,” said Dickie Wong, executive director of research at Kingston Securities.
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While US-China tariff truce is a positive surprise to the market, a durable resolution remains challenging, given the complex bilateral relationship, Morgan Stanley analysts said in a note, adding sentiment on mainland A-shares edged down this week with lower trading volume.
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The smaller Shenzhen index was up 0.34%, the start-up board ChiNext Composite index was higher by 0.16% and Shanghai’s tech-focused STAR50 index was down 0.59%.
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Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.15% while Japan’s Nikkei index was down 0.04%.
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