China and HK stocks drop as investors focus on earnings; CATL slumps
- China’s blue-chip CSI300 Index dropped 0.7% by the lunch break, while the Shanghai Composite Index lost 0.3%
HONG KONG: China and Hong Kong stocks fell on Wednesday despite a broader recoveryin Asian shares, as weaker profit growth in index heavyweight CATL and growing worries over the health of the consumer sector weighed on sentiment.
China’s blue-chip CSI300 Index dropped 0.7% by the lunch break, while the Shanghai Composite Index lost 0.3%.
Hong Kong benchmark Hang Seng was down 0.4%.
Shares of CATL tumbled 10% in both Hong Kong and mainland markets after the top Chinese battery maker posted much slower profit growth in the third quarter, hit by fierce competition andslower China auto sales growth.
Adding to risk aversion was the weak performance of toymaker Pop Mart, whose shares dropped 4% by midday as investors expect its third quarter earnings to disappoint.
Market participants said investors are expressing their bearish view on China’s weak domestic demand through trading consumer stocks ahead of third-quarter earnings.
Liquor and new energy firms led the decline while big data and cloud operators outperformed.
Investors believe policymakers are unlikely to roll out market stimulus measures soon given economic growth remains robust, thanks to exports.
“Rather than seeking to boost near-term growth, the government’s focus remains on technological advancement, industrial upgrading and greater self-sufficiency,” Sophie Altermatt, an economist at Julius Baer, said in a note. ‑Reuters