SHANGHAI: Hong Kong shares fell on Thursday, led by tech stocks, as investors fretted that intensifying competition among e-commerce giants could squeeze profit margins. China stocks edged up.
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China’s blue-chip CSI300 Index rose 0.5% by the lunch break, while the Shanghai Composite Index was up 0.1%. Hong Kong benchmark Hang Seng was down 1%.
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E-commerce giant Alibaba shares listed in Hong Kong fell nearly 4%, leading declines in Hong Kong, after the company announced a 50-billion-yuan ($6.98 billion) subsidy programme to merchants and customers on Wednesday.
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“Alibaba’s plan to offer $7 bn of subsidies for food delivery and online retail implies competition is heating up again among China e-commerce companies,” said UBS analysts.
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Shares of on-demand delivery giant Meituan dropped 2.5%, while JD.com fell 1.7%.
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Meanwhile, a prominent Chinese Communist Party publication called for a crackdown on competition that fuels price wars and squeezes profits in various industries, criticising large companies and local governments for unfair practices.
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China’s services activity expanded at the slowest pace in nine months in June, as demand weakened and new export orders declined amid a fragile trade truce with the United States, a private sector survey showed on Thursday.
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China’s semiconductor shares were little moved after US chip design software developers said they have received notices lifting restrictions on exports to China.
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The US cleared the way to resume ethane exports to China on Wednesday, sending letters to producers Enterprise Products Partners and rescinding a restrictive license requirement put in place just weeks ago, a sign that the US-China trade truce was on track.
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Healthcare shares led gains onshore, up 1.1%, as Beijing ramped up policy support for the country’s innovative drugs.
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Biotech stocks also rose in Hong Kong, with Ascentage up 8.4%.
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