Chinese technology stocks could not hold a break.
Lower Wall Street followed Thursday after ugly days for overseas markets
Dow Jones Industrial Average
From June 2020. Of Hong Kong
Hang Seng index
It is among the worst, losing 2.5% because it was dragged down by the Chinese tech giants which represents some of its biggest components.
Among those who fell was the Internet Titan
(Ticker: 0700.HK), which lost 6.5%. Listed shares of Hong Kong
(BABA) 7.4% submerged. Alibaba’s US-listed stock fell 2.7% in premarket trading after a 5.1% slide on Wednesday, while its e-commerce peer
(JD) was 1.6% lower in the premarket after a 4.6% loss in the previous session.
This group of stocks is under pressure on multiple fronts. Macro risks remain from regulatory environments on both sides of the Pacific, including the possibility of forced de-listing in the United States.
Tech stocks have performed significantly lower in the current environment of more broadly rising interest rates, which puts downward pressure on market valuations that rely on significant future growth. Technology-laden
There is a bear market, down 28% this year.
But, more immediately, corporate profits are the focus.
JD.com has swayed investors by beating quarterly revenue growth expectations in the wake of China’s Kovid-19 lockdown this week, but the company has lost 30 cents per share, down 24 cents per share on Wall Street.
The picture went dark on Wednesday with Tencent’s results, as videogames and social media giants reported lower-than-expected revenue as net revenue fell 51% year-on-year. Profits have dried up as Chinese businesses tightened their purse strings on advertising spending, including budgets, under pressure from epidemic restrictions.
More pain could come if Alibaba reports next earnings.
Alibaba relies heavily not only on sales from services provided to merchants on its platform, such as advertising, but also on discretionary spending from consumers যা which seems to have been compromised in the recession in China.
Write to Jack Denton at [email protected]