Stock market in Hong Kong falls due to concerns over industrial profits in Chinese companies

From The Standard: 2024-06-27 15:11:00

Hong Kong stock market experienced a sharp decline, with the Hang Seng Index falling to a two-month low of 17,716 points. This was attributed to concerns about a slowdown in industrial profits for Chinese companies ahead of a key meeting of China’s top leaders in July.

China’s industrial profits rose only 0.7 percent last month, a significant drop from the previous month’s 4 percent increase. This slowdown in profit growth has raised worries about the overall earnings performance of Chinese companies, especially as weak domestic demand continues to affect growth.

Several tech stocks saw a decline, with Xiaomi dropping 7.2 percent, Tencent falling 2 percent, and Meituan slipping nearly 2.8 percent. Nongfu Spring was the worst-performing blue-chip share, plunging 7.4 percent due to a reported price war in the purified water market.

Despite the overall market decline, major Chinese telecom stocks saw gains, with China Mobile, China Unicom, and China Telecom all recording increases in their stock prices. Citi maintains a target of 19,800 points for the Hang Seng Index by the end of the year, citing optimism regarding Chinese stocks benefiting from policies or strong earnings performance.

A price war in the purified water market and concerns about industrial profit growth contributed to the overall decline in the Hong Kong stock market, with the onshore yuan closing at 7.2689 against the US dollar, marking an almost eight-month low. Traders are advised to closely monitor developments ahead of the upcoming meeting of China’s top leaders.



Read more at The Standard: Stocks tumble on industrial woes