Alibaba, Baidu stocks dip before potential weak China data - report
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Alibaba (BABA) Baidu (NASDAQ:BIDU) and JD.com (JD) were among the Hong Kong stocks that fell on Thursday before an upcoming government report which could suggest that manufacturing in mainland China contracted for a third month in June, The South China Morning Post (SCMP) reported.
Prices also declined as major global central bankers noted that more tightening may be required to combat inflation.
Chinese manufacturing likely contracted again in June, according to economists, as it could take more time to see the impact of policy easing measures.
Alibaba dropped -2.55% to HK$82.20, Baidu fell -4.20% to HK$134.60, while JD slipped -3.70% to HK$132.90. Sports goods maker Li Ning's shares tumbled -6.23% to HK$41.40.
The Hang Seng Index broke a two-day winning streak, as it fell -1.24% to 18,934.36 at the close of Thursday trading.
While, the index has risen this month driven by selective measures to inject additional liquidity and ease borrowing costs, the benchmark has lost around 7.2% since March 31, set for its worst quarter since September 2022.
China's PMI Manufacturing Index likely stayed at 49 in June, as per estimates before a statistics bureau report on Friday, the SCMP added. This would be slightly different from 48.8 in May and 49.2 in April, suggesting sustained weak demand from overseas. Below 50 indicates a contraction in activity.
"With such downside risks, as well as the weakness in consumption and the property market, we believe more policy support is warranted to prevent a further slippage in growth," according to a report by Bank of America cited by SCMP.
The decision makers may roll out additional easing measures but these could be more likely to be a calibration, rather than a "bazooka package" in the near term, as per the Bank of America report.
Thursday's European markets were also mixed as central banks mulled more rate hikes. The Euro area Economic Optimism Index also fell in June to 95.30 points, compared to 96.50 points in May.
BABA -1.05% to $83.70 premarket June 29
BIDU -3.25% to $137.18
JD -2.56% to $33.90
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