HONG KONG: Hong Kong stocks slumped to a one-year low on Wednesday, while China shares also closed lower, as food delivery giant Meituan’s cautious fourth-quarter outlook raised recovery concerns over China’s consumer spending.

The blue-chip CSI 300 Index dropped nearly 1%, while the Shanghai Composite Index was down 0.6%.

Hong Kong’s Hang Seng Index fell 2.1% and the Hang Seng China Enterprises Index lost 2.3%.

Shares of Hang Seng Index heavyweight Meituan slumped 12% after the company forecast its fourth-quarter revenue growth for its core food delivery business to slow versus the preceding quarter, citing persistent consumer caution and warmer weather for the winter season hitting orders as reasons.

Shares of Meituan fell to a 3-1/2-year low on Wednesday, despite the company promising a $1 billion buyback.

Caroline Yu Maurer, head of China and specialised Asia strategies at HSBC Asset Management, expects China markets to stay volatile in the near-term.

“There is potential for further savings drawdown to support consumer spending (in 2024), though confidence needs to clearly improve and is key to the outlook,” she said.

Meanwhile, analysts do not expect a quick turnaround in the property market in 2024 despite intensified policy support.

“Homebuyers’ sentiments remain weak amid uncertain employment and income prospects,” Fitch Ratings said in a report on Wednesday.

Hong Kong-listed mainland developers dropped 4.4%, while Hang Seng Tech Index retreated 2.3%.

In the mainland markets, real estate stocks and automobile companies led the decline with a 3.3% and a 2.9% drop, respectively.

A Reuters poll on Wednesday forecast that China’s manufacturing activity likely contracted for a second consecutive month in November. – Reuters