Hong Kong shares drop sharply on major losses in Chinese firms / Photo: © AFP
Hong Kong shares drop sharply on major losses in Chinese firms
Hong Kong shares fell sharply on Tuesday on the back of major losses in Chinese firms, as a lack of clear direction ahead of key announcements this week presented a challenge for global investors.
It was the third straight day of losses on the Hang Seng Index, with Alibaba Group Holdings down more than three percent, internet giant Baidu down nearly four and pharmaceutical maker Wuxi Biologics dropping almost seven.
The index had shed nearly two percent at the close.
"Investors seem to be having concerns about the sustainability of the recovery in China and the heightening of geopolitical tensions," Redmond Wong, of Saxo Capital Markets HK, told Bloomberg.
Shanghai was down as well, while Taipei lost more than 1.5 percent.
Seoul was another big loser, despite of a surge in media stocks following a $2.5 billion investment announcement by Netflix, as well as new data showing South Korea had dodged a technical recession in the first quarter.
Manila, Bangkok, Kuala Lumpur and Singapore were also down, while Tokyo, Mumbai, Wellington and Jakarta were up.
US equity futures were trading lower and bourses in London, Frankfurt and Paris all opened down on Tuesday after spending the previous session dipping in and out of negative territory.
- No 'clean read' -
Traders have largely been treading water ahead of earnings results from US tech behemoths such as Amazon, Microsoft, Facebook owner Meta and Google parent Alphabet.
Investors are also waiting for important economic data from Australia and the eurozone, as well as a policy meeting of the Bank of Japan.
Stephen Innes of SPI Asset Management said in a note that despite "a reasonably constructive picture on the economy front", it was tough to get "a clean read on anything happening this week".
"One of the most challenging things about navigating this bear market and the widely anticipated coming recession is that we've had to differentiate between real and nominal economic and market variables like nothing in recent decades," he said.
The US calendar also includes readings on first-quarter gross domestic product and an update on consumer confidence, as well as a potential vote in the long-running political stalemate over the US debt ceiling.
Moody's Analytics said in a note Monday that a Republican plan to raise the debt ceiling in exchange for cuts in government spending would lead to a drop of 0.6 percentage points in US potential growth for 2024 and eliminate 780,000 jobs.
Following recent shocks in the banking sector, UBS on Tuesday posted an underwhelming first quarter net profit of $1.0 billion but insisted it had seen strong client inflows as it prepared to integrate its stricken rival Credit Suisse.
Shares in UBS, Switzerland's biggest bank, were down around four percent in early trade following the announcement.
US lender First Republic Bank reported a more than 40 percent drop in deposits in the first quarter this year, but added that the situation had stabilised since late March.
Its shares fell more than 20 percent in after-hours trading following the earnings report, its first since the dramatic failures of Silicon Valley Bank and Signature Bank last month shone a spotlight on regional lenders and their vulnerabilities.
- Key figures around 0830 GMT -
Hong Kong - Hang Seng Index: DOWN 1.7 percent at 19,617.88 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,264.87 (close)
Tokyo - Nikkei 225: UP 0.1 percent at 28,620.07 (close)
London - FTSE 100: DOWN 0.4 at 7,882.14
Euro/dollar: DOWN at $1.1029 from $1.1050 on Monday
Pound/dollar: DOWN at $1.2462 from $1.2485
Dollar/yen: FLAT at 134.14 yen
Euro/pound: UP at 88.51 pence from 88.46 pence
West Texas Intermediate: DOWN 0.2 percent at $78.63 per barrel
Brent North Sea crude: DOWN 0.1 percent at $82.68 per barrel
New York - Dow: UP 0.2 percent at 33,875.40 (close)
S.Mitchell--TNT
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