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Financials

Hong Kong stocks post biggest monthly drop in a year, dragged by tech shares

(Updates closing prices, adds details)

SHANGHAI, July 29 (Reuters) - Hong Kong stocks ended lower to post the biggest monthly drop in a year on Friday, pressured by sharp losses in major tech firms, which reignited investor worries over clampdown on the tech sector, while mainland China stocks also fell.

** At the close, China’s blue-chip CSI300 Index fell 1.32% to 4,170.10 points, and it also lost 7% to book the biggest monthly loss since March.

** The Shanghai Composite Index ended the session lower by 0.89% at 3,253.24 points and lost 4.3% in July, snapping a two-month winning streak. ** In Hong Kong, the benchmark Hang Seng Index dropped 2.26% to 20,156.51 points. It lost 7.8% for the month, booking the biggest monthly drop since July 2021. Chinese H-shares listed in Hong Kong plunged 2.78% to 6,885.48 points.

** Sharp losses in Hong Kong were led by major tech firms as investors worried about continued clampdown on the sector after a Wall Street Journal report said Chinese billionaire Jack Ma planned to cede control of financial technology firm Ant in an effort to move away from affiliate Alibaba.

** Hong Kong shares of Alibaba Group slumped 6.1% to HK $93.1 at the close.

** Shares of China’s food ordering and delivery platform Meituan fell 6.22% to HK $176.30 after China’s Hangzhou market regulator said on Thursday it had summoned Meituan, Ele.me and other take-out delivery platforms over “vicious” price-cutting and poor regulation.

** Another internet gaming and social media giant Tencent Holdings also posted huge losses on Friday by plunging 4.36% to HK$306.8 after a source told Reuters that India blocked a popular battle-royale format game from Krafton Inc , a South Korean company backed by Tencent, using a law it has invoked since 2020 to ban Chinese apps on national security concerns.

** Hang Seng Tech Index, a gauge that tracks the performance of major tech firms listed in the financial hub, fell 4.86% by the close. ** China will try hard to achieve the best possible results for the economy this year, state media said on Thursday after a high-level meeting of the ruling Communist Party, dropping previous calls that it will strive to meet its 2022 growth target. ** Many analysts believe the government omitted mentioning of reaching full-year GDP growth target, a sign that fresh stimulus could be held off for the time being. ** “In its guidelines for policies, the Politburo meeting did not signal any major new stimulus that could be on the way,” said Wang Tao, head of China economic research at UBS.

“Instead, more supportive fiscal and monetary policy were to mainly come from ‘fuller and better utilization’ of existing measures.”

** The Politburo meeting vowed to stick with the zero-COVID strategy and pressured the tourism sector on Friday. An index tracking tourism-related stocks lost 3.6% for the day and more than 12% for the month. (Reporting by Shanghai Newsroom; editing by Uttaresh.V and David Evans)

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