HONG KONG: Hong Kong stocks started higher Friday, tracking increases for U.S. markets, but soon fell back to the flat line as a heavy drop in index heavyweight Tencent Holdings Ltd. 0700, -3.19% TCEHY, -0.06% dragged on the market after New York-listed rival Alibaba Group Holding Ltd.’s earnings undershot estimates.
The Hang Seng Index HSI, -0.11% was flat, with the Hang Seng China Enteprises up 0.3%. Tencent retreated 2.6%, after stock in Alibaba BABA, -0.40% plunged 8.8% overnight. Alibaba’s two Hong Kong-traded subsidiaries also suffered significant losses, with Alibaba Pictures Group Ltd. 1060, -5.42% dropping 3.6%, and Alibaba Health Information Technology Ltd. 0241, -3.01% sliding 1.9%. Most of the other major tech stocks declined, as online game operator IGG Inc. 8002, -4.07% retreated 3.7%, software developer Kingsoft Corp. 3888, -3.95% KSFTF, -0.52% fell 3.2%, rival Kingdee International Software Group 0268, -4.55% KGDEF, +12.70% gave up 3%, and game developer Boyaa Interactive International Ltd. 0434, -0.92% shed 1.1%. Several brokerage firms extended losses after pulling back the previous day on reports of a further crackdown on margin-trading rules, with China Galaxy Securities Co. 6881, -1.55% down 1.1%, and Shenyin Wanguo HK Ltd. 0218, -1.46% off 1%. However, China Everbright Ltd. 0165, +0.36% CEVIF, +3.94% recovered 0.8%. Over on the Chinese mainland, the Shanghai Composite Index SHCOMP, -0.97% edged 0.3% lower.
