Hang Seng slumps below 20,000 with JD.com, Alibaba pacing losses as China reports faster inflation, heightened tech rivalry

Stocks fell by the most in more than a week in Hong Kong after report showing faster inflation in mainland China last month

US inflation data later today could influence the pace of future rate increases, with 69 per cent current odds for a 75-basis point hike in September

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Pedestrians wait to cross a road in front of a public screen displaying stock data in Shanghai in February 2022. Photo: Bloomberg

Published: 10:47am, 10 Aug 2022Updated: 4:47pm, 10 Aug 2022

Hong Kong stocks slumped after consumer prices in mainland China increased by the most in two years, limiting room for further monetary stimulus. Regional markets also weakened before a US inflation report while US-China tech rivalry intensified.

The Hang Seng Index retreated 2 per cent to 19,610.84 at the close of Wednesday trading, its biggest setback in more than a week. The Tech Index declined 2.8 per cent, while the Shanghai Composite Index fell 0.5 per cent.

Alibaba Group Holding slipped 1.8 per cent to HK$87.95 while Meituan dropped 3.6 per cent to HK$169.60 and JD.com sank 4.5 per cent to HK$218.40. WuXi Biologics lost 9.3 per cent to HK$67.60. Developer Longfor crashed 16 per cent to HK$20.90 and Country Garden tumbled 7.2 per cent to HK$2.33.

“Economic data in June and July remains rather disappointing,” said Will Shum, research director at iFAST Financial in Hong Kong. “Given the size of the stimulus launched and also the aggressive monetary easing in May, [China] will take a wait and see stance to judge the effectiveness before pushing for another round of easing.”