China Indexes Erase 2024 Gains Ahead of Earnings Season, Chow Tai Fook Sales Drop 20%

Li Chen
24 Jul, 2024
Hong Kong

Investors focused on corporate results as the earnings season kicked off, and market sentiment was cautious as property market malaise showed no signs of easing. 

Stocks in Hong Kong and Shanghai declined on the worry that the recent flurry of salary cuts announced in the financial sector are going to create another headwind for property prices in tier-1 cities. 

Property prices have been still rising in the tier-1 cities, unlike smaller cities where prices have declined for the third year in a row. 

However, prices have started to soften in Shanghai, Beijing, and Shenzhen after the latest cuts in staff and salaries in the financial services industry. 

Investors were cautious after the jewelry retailer Chow Tai Fook said sales in the latest quarter declined 20% from a year ago. 

Li Auto and other electric vehicle makers declined after Tesla reported weaker-than-expected earnings in the second quarter. 

The two widely followed indexes, the Hang Seng index and the CSI index, have nearly erased this year's gains amid a weak economic growth outlook, a protracted property market slump, and weakening consumer confidence. 

 

China Stock Movers 

The Hang Seng index declined 0.8% to 17,338.51 and the CSI 300 index dropped 0.5% to 3,423.40. 

Chow Tai Fook Jewelry Group Ltd. dropped 5.5% to HK$7.49 after the retailer reported weak quarterly results. 

Same store sales in Mainland China plunged 26.4% and in Hong Kong declined 30.8% from a year ago, respectively. 

Same store average selling price of gold jewelry was resilient, and in Mainland China it rose to HK $6,200 from HK $5,400, and in Hong Kong and Macau it increased to HK $8,900 from HK $8,400. 

Electric vehicle makers declined after Tesla reported weaker-than-expected quarterly earnings.

Li Auto declined 4.4% to HK $74.25, BYD dropped 2.7% to HK $232.0, and Xpeng decreased 5.5% to $32.10. 

Tech stocks also traded volatile amid market anxieties ahead of the start of the earnings season. 

Tencent Holdings declined 0.7% to HK $363.40, Alibaba Group increased 0.7% to HK $74.45, Baidu fell 0.5% to HK $87.85, and Meituan dropped 4.7% to HK 105.10.