Asian markets on the rise but Alibaba’s fall hurts Hong Kong

HONG KONG, China: Hong Kong fell on Friday on an otherwise positive day for Asian markets, with Chinese e-commerce titan Alibaba falling more than 10% after warning from a weaker outlook.

Alibaba said Thursday that its net profit fell 81% in the second quarter and that its revenue grew less than expected, hit by the impact of slowing economic growth and a government crackdown on the tech sector.

The company, once the star child of high-flying Chinese private companies, also said revenue growth for the remainder of the year was below expectations, adding that certain factors could further impact results. , including “changes in laws, regulations and (the) regulatory environment”, such as those related to privacy and data.

The steep loss in Hong Kong reflected a fall of more than 11% in its shares in New York and comes after a painful year that saw the company in the crosshairs of Beijing’s regulatory desire to curb companies it deemed. more and more powerful.

With Alibaba being a major player in Hong Kong’s Hang Seng Index, the market plunged 1.7% and other tech companies including Tencent, NetEase and XD also fell.

However, losses were limited elsewhere in Asia, with only Wellington and Manila falling.

Tokyo climbed as the government announced plans to inject nearly $ 500 billion into the Japanese economy to kickstart recovery from a pandemic.

Gains were also recorded in Shanghai, Singapore, Sydney, Seoul, Taipei and Jakarta.

Traders had received a positive lead from Wall Street, where all three major indexes finished just below record highs, although the focus remains on soaring inflation and rising expectations that central banks will tighten policy. monetary earlier.

Data this month showed prices were rising to levels not seen in three decades in the United States, 18 years in Canada and 10 years in the United Kingdom due to soaring energy costs and global supply chain growls.

The chief financial officers of some countries, including South Korea and New Zealand, have already raised interest rates, and the Bank of England is expected to follow suit before the end of the year.

But all eyes are on the Federal Reserve, which has already announced plans to end its massive bond buying program, but now faces increasing pressure to raise borrowing costs as early as mid-2022. .

“Short-term concerns are that banks are reversing estimates of when the Fed will start raising overnight interest rates in 2022, Fed comments on broader inflation trends, the possibility of a change of Fed chairman by the Biden administration and fears of a seasonal peak in Covid cases, ”said market analyst Louis Navellier.

“Lira remains a punching bag”

Oil extended Thursday’s lead after a recent sell-off, with little reaction to news that China will release some of its reserves following a call from US President Joe Biden to Xi Jinping to help mitigate a surging prices which is partly responsible for spikes inflation.

“The oil market deficit will always remain despite the use of reserves and the next big price movement will most likely depend on the weather,” said Edward Moya of Oanda.

“Natural gas prices may be the main driver in the near term as Russia plays hard with Europe. Any shortage of natural gas will lead to additional demand for crude as the rush to alternative energy sources intensifies . “

Meanwhile, the Turkish lira held near a record low against the dollar after Thursday’s collapse in response to the central bank’s decision to cut interest rates for the third month in a row following the pressure from President Recep Tayyip Erdoğan.

The move came despite inflation hovering around 20% – four times the government’s target – while the pound has lost a third of its value this year.

And Moya warned, “Reading it is still a punching bag and a new weakness has no end in sight.”

Key figures around 03:00 GMT

Tokyo – Nikkei 225: UP 0.4% to 29,718.62 (pause)

Hong Kong – Hang Seng Index: DOWN 1.7% to 24,884.10

Shanghai – Composite: EN up 0.1% to 3,525.06

Dollar / yen: UP at 114.40 yen vs. 114.24 yen at 2145 GMT

Pound / dollar: DOWN to $ 1.3486 from $ 1.3501

Euro / dollar: DOWN to $ 1.1354 from $ 1.1374

Euro / pound: up to 84.20 pence against 84.22 pence

West Texas Intermediate: EN up 0.4% to $ 79.30 per barrel

North Sea crude: up 0.8% to $ 81.90 per barrel

New York – Dow: DOWN 0.2% to 35,870.95 (close)

Paris – CAC 40: DOWN 0.2% to 7,141.98 (closing) AFP

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