China, Hong Kong Stocks Drop Amid Alibaba Earnings and US Tech Tensions

Chinese and Hong Kong stock markets continued to decline on Friday as investors reacted to renewed tensions between the U.S. and China, especially in the technology sector. A disappointing earnings report from Alibaba also hurt market sentiment.

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Key Market Index Updates

• Shanghai Composite Index fell by 0.52%, closing at 3,363.32 points.
• CSI300 Index, which tracks top Chinese stocks, dropped 0.57%.
• Financial sector: -1.31%
• Consumer staples: -1.04%
• Real estate: -0.61%
• Healthcare: -0.36%
• Hong Kong's Hang Seng Index fell by 0.81% to 23,262.80 points.
• Alibaba shares dropped 5.3% after its quarterly revenue missed expectations.

Mixed Performance in Tech and Start-Up Indexes

While most major indexes were down:

• Shenzhen Index rose 0.34%
• ChiNext Composite Index (start-up board) was up 0.16%
• STAR50 Index (tech stocks) dropped 0.59%

US-China Tech Tensions Grow Again

The U.S. is considering adding more Chinese tech companies to its export restriction list. These include:

• ChangXin Memory Technologies (CXMT)
• Subsidiaries of Semiconductor Manufacturing International Corporation
• Yangtze Memory Technologies Co

This move could limit Chinese companies' access to American technology and increase trade tensions again.

Expert Views on the Situation

Dickie Wong from Kingston Securities said the market is now focusing on U.S.-China competition in sectors like semiconductors and healthcare.

Morgan Stanley noted that while the tariff truce between the two countries is positive, deep-rooted issues remain. They also observed a drop in trading activity on Chinese markets.

Regional Market Snapshot

• MSCI Asia (excluding Japan) index was slightly down by 0.15%
• Japan’s Nikkei Index fell marginally by 0.04%

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