[WORLD] Hong Kong stocks pulled back from a two-month high on Thursday, snapping a two-day winning streak, as investor concerns over Baidu’s advertising outlook and the monetisation potential of its artificial intelligence initiatives weighed on sentiment.
Shares of the Chinese search engine operator slid after analysts raised doubts about its ability to translate AI advancements—such as its Ernie bot—into tangible profits. The setback reflects broader market unease about the sustainability of growth in the tech sector amid intensifying regulatory scrutiny and a slowing Chinese economy. Despite Beijing's push for technological self-reliance, investors remain wary of the challenges firms face in delivering financial returns.
The Hang Seng Index declined 0.9 per cent to 23,620.64 as of 11:03 a.m. local time, while the Hang Seng Tech Index fell 1.1 per cent. On the mainland, the CSI 300 Index slipped 0.2 per cent, and the Shanghai Composite Index dropped 0.3 per cent.
Analysts attributed the broader market retreat to profit-taking after recent gains, alongside persistent concerns over geopolitical tensions. A hawkish tone from the U.S. Federal Reserve has further dampened risk appetite, with investors closely monitoring its potential impact on global liquidity. As a key conduit for foreign capital into Chinese assets, Hong Kong's stock market remains especially sensitive to such macroeconomic dynamics.
Baidu shares tumbled 3 per cent to HK$83.50 after Daiwa Securities Group lowered its forecasts for the company’s advertising revenue, despite Baidu posting stronger-than-expected quarterly earnings.
Consumer and tech stocks were also under pressure. Bottled water producer Nongfu Spring slumped 4.9 per cent to HK$36.65, following reports of weaker-than-anticipated demand for premium water in major markets. Kuaishou Technology, a leading short-video platform, dropped 2.8 per cent to HK$48.95 amid industry-wide concerns about rising competition and ongoing regulatory scrutiny affecting content monetisation.
Alibaba Group Holding lost 2 per cent to HK$120.60, extending recent volatility as investors await updates on its restructuring efforts, including a potential spin-off of its cloud division. The company’s stock continues to serve as a barometer for broader sentiment in China’s tech space. Analysts caution that until there is greater clarity on both regulatory policies and macroeconomic conditions, Alibaba shares may remain under pressure.
Looking ahead, traders are bracing for more turbulence as markets await the release of key Chinese economic data later this week, including industrial production and retail sales. These figures are expected to provide important insights into the trajectory of the world’s second-largest economy and could play a pivotal role in shaping market direction.
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