Chinese stocks listed in Hong Kong are nearing a bear market as a global rush into artificial intelligence supply chain players sidelines the Internet and consumer companies that dominate the offshore benchmark. The MSCI China Index has dropped 18% from its October peak, while a measure of Chinese shares listed in Hong Kong has fallen nearly 9% this year, ranking among the worst performers of more than 90 global equity gauges tracked by Bloomberg. Investors are increasingly favoring chipmakers listed on the mainland and in other North Asian markets, where companies are seen as the biggest beneficiaries of surging AI demand, while weak earnings growth and easing liquidity add pressure to offshore gauges. Financial shares make up more than 28% of the Hang Seng China Enterprises Index and consumer names nearly 23%, in contrast to Taiwan and South Korea where semiconductor firms account for at least half of index weightings. Analysts have trimmed forward earnings estimates for HSCEI members by nearly 3% from a year ago, while raising projections for Korea's Kospi Index by 246% and Taiwan's Taiex gauge by 58%, and mainland investors sold a net HK$3.6 billion worth of Hong Kong-listed shares through the stock connect program in May, the first monthly outflow since June 2023.
Tencent Holdings LtdAI rally passes by Chinese internet companies; weak earnings growth and easing liquidity add pressure
Alibaba Group Holding LtdAI rally passes by Chinese internet companies; weak earnings growth and easing liquidity add pressure
Goldman Sachs Group Inc