Hong Kong stocks slide as China’s new gaming crackdown hits Tencent and NetEase

The Hang Seng Index dropped 0.4 per cent to 16,548.98 at the local noon trading break, extending the decline for the week to 1.5 per cent. The benchmark earlier advanced by as much as 1.4 per cent. The Tech Index dropped 1.5 per cent and the Shanghai Composite Index rose 0.5 per cent.

Tencent plunged 7.2 per cent to HK$290.20, the biggest drop since October 2022, while NetEase slumped 12 per cent to HK$142.10, the most since July 2021. The two command about 9.1 per cent weight in the Hang Seng Index and 14 per cent in the Tech Index. Elsewhere, Bilibili lost 5.3 per cent to HK$84.15 while Kuaishou slipped 1.3 per cent to HK$53.30.

The Hang Seng Index has declined 16 per cent this year, making it the worst performer among major world benchmarks. Global funds stayed bearish on China’s outlook, even as valuation at 5.6 times earnings multiple ranks as the cheapest among them, according to Bloomberg data.

Limiting the losses, China’s top lender ICBC gained 0.5 per cent to HK$3.70, while peer Construction Bank added 0.2 per cent to HK$4.52 and HSBC rose 0.7 per cent to HK$61.70.

China to see healthy and sustainable growth in the year ahead: PBOC chief

“Lower deposit rates should help alleviate pressures on net interest margins and lay the groundwork for the PBOC to cut its policy lending rates in January, which have been left unchanged for the past four months,” said Lu Ting, chief China economist at Nomura in Hong Kong. “If these cuts materialise, it would signal Beijing has become increasingly concerned about the downward pressure on growth.”

Four companies made their debuts in Hong Kong today. Gold producer Persistence Resources was unchanged at HK$0.55, while drug maker HighTide Therapeutics rallied 7.7 per cent to HK$12.38. Logistics provider FAR International surged 7.8 per cent to HK$0.97 and tea producer Pu’er Lancang Ancient Tea dropped 7.1 per cent to HK$9.94.

In Shanghai, Hsino Tower Group, which makes steel towers for power lines, surged 359 per cent to 7.81 yuan on its first day of trading.

Major Asian markets mostly rose. Japan’s Nikkei 225 climbed 0.2 per cent and South Korea’s Kospi gained 0.4 per cent, while Australia’s S&P/ASX 200 was little changed.