SHANGHAI: China and Hong Kong stocks fell on Monday, led by Chinese state-owned enterprises and tech shares, as China’s industrial profit slump and geopolitical tensions dented sentiment.
China’s blue-chip CSI300 Index and the Shanghai Composite Index both closed down 0.4%.
Hong Kong’s benchmark Hang Seng Index was down 1.8%, and the China Enterprises Index lost 2.2%.
Profits at industrial firms in China declined 22.9% in the first two months of 2023 from the year before, as the factory sector struggles to claw its way out of the slump caused by COVID-related disruptions.
A senior Communist Party official said on Saturday the foundation of China’s economic recovery was not solid enough, warning of possible spillover effects from global economic problems.
Geopolitical tensions also weighed. Russian President Vladimir Putin said on Saturday the country would station tactical nuclear weapons in Belarus.
Shares of Chinese state-owned enterprises dropped, giving up some of this month’s gains. Shares of China Petroleum & Chemical Corp lost 3.1% after the company recorded a 6.9% decline in 2022 net income. Meanwhile, PetroChina Co Ltd slid 1.1%.
Telecommunication stocks also dropped, with China United Network Communications Ltd, China Mobile Ltd , and China Telecom Corp Ltd, down 1.8%, 3.2%, and 4.2%, respectively.
Tech stocks traded in Hong Kong slumped 2.8%, led by Meituan. Shares of Meituan tumbled 6.3%, following its fourth-quarter earnings release. Tencent and Xiaomi lost 3.7% and 3.5%, respectively.
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