Earnings jitters yesterday hit shares in Hong Kong after several Chinese tech companies reported worse-than-expected results.
The Hang Seng Index slid 2.4 percent, extending its weekly decline to 3.3 percent, the worst in five weeks. All but one stock on the 50-member gauge dropped, with technology shares tracking overnight losses for Chinese stocks listed in the US.
Tencent Holdings Ltd (騰訊) slid 4.9 percent ahead of next week’s quarterly report, while AAC Technologies Holdings Inc (瑞聲) had its worst week since 2010 as brokers downgraded the stock after disappointing results. Sunny Optical Technology Group Co (舜宇光學) fell 1.3 percent.
A rout in technology stocks has punished the Hang Seng Index this year, tipping it into a bear market in September. The gauge has just come off its longest streak of monthly losses in 36 years. Analysts have trimmed their earnings expectations for this year, predicting a contraction for members of the gauge on average.
“Concerns about an earnings slowdown are rising in China markets after AAC Technologies missed estimates,” said Castor Pang (彭偉新), head of research at Core Pacific-Yamaichi (京華山一) in Hong Kong. “There have been a few downgrades on the smartphone makers and earnings worries are spilling over to Tencent. It’s hurting sentiment for the whole market.”
AAC dropped 1.6 percent, ending the week with an 18 percent tumble as its third-quarter results prompted analyst downgrades. Tencent fell the most in nearly a month, while Sunny Optical lost 10 percent for the week.
Chinese investors dumped HK$1.9 billion (US$ 242.66 million) of Hong Kong stocks, the biggest selloff in nearly two weeks, Bloomberg data based on daily trading turnover showed.
On a weekly basis, Chinese investors have been net sellers of the territory’s shares for two weeks in a row.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Advanced Micro Devices Inc (AMD) suffered its biggest stock decline in more than a month after the company unveiled new artificial intelligence (AI) chips, but did not provide hoped-for information on customers or financial performance. The stock slid 4 percent to US$164.18 on Thursday, the biggest single-day drop since Sept. 3. Shares of the company remain up 11 percent this year. AMD has emerged as the biggest contender to Nvidia Corp in the lucrative market of AI processors. The company’s latest chips would exceed some capabilities of its rival, AMD chief executive officer Lisa Su (蘇姿丰) said at an event hosted by
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TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
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