Chinese stocks experienced a downturn on Friday, marking an end to a five-week streak of gains. This was largely due to a decline in technology shares listed in Hong Kong and a series of underwhelming earnings reports. The CSI 300 Index saw a significant drop of up to 1.6%, its largest since January, while the Hang Seng Tech Index plummeted by up to 4.4%. Additionally, a sudden depreciation of the yuan to a four-month low further impacted equities.
The recent rebound in Chinese equities, which began in early February, seems to be losing momentum. Investors are now looking for solid corporate performance to justify the continued rally. Unfortunately, the earnings reports released so far have not been reassuring.
Among the notable underperformers was Li Auto Inc., which adjusted its first-quarter guidance downwards. Similarly, disappointing results from Ping An Insurance Group Co. and CK Asset Holdings Ltd. have heightened concerns about upcoming earnings reports from China’s largest financial institutions and property developers.
Ping An Insurance experienced its most significant drop in over a year after its net income fell short of expectations. CK Asset also saw its largest decline on record as analysts quickly downgraded the stock following a dividend payout cut.
