Alibaba, SMIC Hong Kong stocks slide on tech earnings risk, Fed rate caution

Name: Chinese President Xi Jinping holds rare meeting with China’s top entrepreneurs amid US tech rivalry
Uploaded: 2025-02-20T02:41:25.000Z
Duration: 1 min 18 s
Description: Chinese President Xi Jinping holds rare meeting with China’s top entrepreneurs amid US tech rivalry

Alibaba, Bilibili and NetEase publish earnings on Thursday; Fed minutes show officials prepared to wait before making more rate cuts

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Cars travel past a pedestrian overpass with a display of stock information at the Lujiazui financial district in Shanghai. Photo: Reuters

Aileen Chuang

Published: 10:41am, 20 Feb 2025Updated: 4:41pm, 20 Feb 2025

Hong Kong stocks fell for a second day on concerns the tech bull run is overstretched without a solid backing in earnings growth, while Federal Reserve officials raised caution on future interest-rate cuts amid economic challenges.

The Hang Seng Index dropped 1.6 per cent to 22,576.98 on Thursday, while the Hang Seng Tech Index slumped 3 per cent. On the mainland, the CSI 300 Index declined 0.3 per cent, while the Shanghai Composite Index ended little changed.

Alibaba Group Holding slid 2.6 per cent to HK$120.90, retreating from a three-year high before its earnings report after the market close. The e-commerce firm, which owns the Post, has gained more than US$100 billion in market value this year amid the euphoria surrounding start-up DeepSeek’s artificial intelligence breakthrough.

Mobile-gaming firm NetEase fell 2.7 per cent to HK$158.10, while video-platform operator Bilibili lost 5.3 per cent to HK$154.80 before their report cards. Tencent Holdings tumbled 2.2 per cent to HK$486.80, food-delivery firm Meituan sank 6.2 per cent to HK$156.90 and chipmaker SMIC lost 3 per cent to HK$50.25.

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Chinese President Xi Jinping holds rare meeting with China’s top entrepreneurs amid US tech rivalry

Thursday’s slump clipped some of Hong Kong’s US$285 billion market rally this year, which was fuelled by DeepSeek’s AI model that outperformed its global peers. Goldman Sachs, UBS and Morgan Stanley raised their targets for Chinese equities for this year, while saying more economic stimulus was also needed to justify the stock rally.