Hong Kong stocks surrender gain on China deflation risk as Tencent snaps 6-day rout

Name: How can Hong Kong save itself from its nearly HK$100 billion deficit?
Uploaded: 2025-01-09T02:52:46.000Z
Duration: 12 min 40 s
Description: How can Hong Kong save itself from its nearly HK$100 billion deficit?

Tencent stepped up stock buy-backs after a HK$477 billion sell-off in the past six trading days

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Pedestrians walk past a screen showing the Hang Seng index in Hong Kong on November 6, 2024. Photo: EPA-EFE

Zhang Shidongin Shanghai

Published: 10:52am, 9 Jan 2025Updated: 4:39pm, 9 Jan 2025

Hong Kong stocks surrendered gains, sending the benchmark index back to a six-week low, on concern sticky deflation in mainland China will hamper efforts to recharge the economy. Tencent Holdings snapped a six-day slump.

The Hang Seng Index slipped 0.2 per cent to 19,240.89 on Thursday to a level last seen on November 26. The gauge erased an earlier gain of as much as 0.7 per cent. The Tech Index climbed 0.1 per cent while the Shanghai Composite Index retreated 0.6 per cent.

Sportswear maker Li Ning slumped 5 per cent to HK$15.56 and electric-car maker Li Auto lost 4.4 per cent to HK$87.50 while e-commerce leader Alibaba Group retreated 0.4 per cent to HK$80.60.

Limiting losses, Tencent advanced 1.1 per cent to HK$373.40 to halt a losing streak partly triggered by the US decision to blacklist the WeChat owner as a Chinese military company. Anta Sports rallied 4.5 per cent to HK$78.60 after UOB Kay Hian said its retail sales picked up last quarter.

Tencent, the third-largest Hong Kong-listed firm, has spent HK$3.7 billion (US$475.6 million) to buy back its own shares this week, according to exchange filings, after a six-day rout that erased HK$477 billion from its market value.

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How can Hong Kong save itself from its nearly HK$100 billion deficit?

Local stocks have wavered in the new year, losing most of the 26.5 per cent rally driven by Beijing’s stimulus blitz on September 24, amid concerns about president-elect Donald Trump’s trade policies. The Hang Seng Index may rise by less than 10 per cent in 2025, hobbled by policy uncertainty, US-China tensions and slower US rate cuts, UBS said.