Alibaba results weigh on Hong Kong stocks, with Baidu, JD.com and Meituan sending index to 2-month low

Hong Kong stocks fell to a two-month low after Alibaba's underwhelming revenue growth for the quarter disappointed investors, adding to concerns China's post-Covid recovery is losing momentum.

The Hang Seng Index slumped 1.3 per cent to 19,450.57 on Friday, losing 0.8 per cent for the week and closing at its lowest point since March 16. The Tech Index fell 2.4 per cent, while the Shanghai Composite Index declined 0.3 per cent.

Alibaba Group Holding plunged 6 per cent to HK$82.40, JD.com dropped 4.7 per cent to HK$137.20 and Baidu retreated 4.5 per cent to HK$120.00. Meituan lost 3.7 per cent to HK$128.60. The Chinese delivery giant is set to launch in Hong Kong as early as next Monday, according to a Bloomberg report quoting sources.

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Geely Auto fell 0.4 per cent to HK$9.42. The carmaker on Thursday said it had bought a 17 per cent stake in British sports car maker Aston Martin. Its peer Nio lost 1.9 per cent to HK$61.80 while Xpeng retreated 1.9 per cent to HK$35.55.

Alibaba reported a 2 per cent increase in fourth-quarter revenue at 208.2 billion yuan (US$30.3 billion), missing analysts' estimates of 209.2 billion yuan. The company also approved a full spin-off of its business units, starting with Cloud Intelligence Group, which is set to be publicly listed within the coming year, chairman and CEO Daniel Zhang Yong said.

"Alibaba's financial result does not offer too much surprise as it broadly reflects China's reopening [losing traction]," said Gary Ng, a senior economist at Natixis in Hong Kong. "It is at the core of the market concerns right now."

Whether Alibaba can restructure successfully and finally list its units will be important for market sentiment in China's tech sector, he added.

Goldman Sachs said in a report on Friday that while China's fiscal revenue growth accelerated in April, issues including rising government debt levels and falling return on capital will restrain the government's ability to roll out more pro-growth measures through fiscal policies.

Three companies began trading in China. In Shanghai, semiconductor manufacturer Skyverse Technology surged 190 per cent to 68.35 yuan, while medical-equipment maker Hangzhou AGS MedTech slipped 1.2 per cent to 124.30 yuan. Telecommunications service provider Shijihengtong Technology added 76 per cent to 46.40 yuan in Shenzhen.

Elsewhere, Japan's Nikkei 225 added 0.8 per cent taking it to its highest point since August 1990. Australia's S&P/ASX 200 climbed at least 0.6 per cent, while South Korea's Kospi rose 0.9 per cent.

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