Alibaba, Other Hong Kong Stocks Show Optimism In Early Trade Even As Analysts Downgrade China Growth Projections

Hong Kong’s Hang Seng index opened in the green on Friday, gaining 0.12% in opening trade, following a muted session on Wall Street. Investors also digested macro news from Japan where the headline inflation rose to 2.6% in July as compared to 2.4% in June.

Macro News: China’s military is likely to get a new leadership line-up as four out of the seven members on the Central Military Commission are at, or have passed, the retirement age and may step down at the upcoming party congress, reported the South China Morning Post. The report added Xi Jinping, who heads the CMC, may be looking for combat experience and loyalty when making his picks.

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Goldman Sachs and Nomura have downgraded their projections for China’s growth, over weaker demand, uncertainties stemming from zero-Covid policy and an energy crunch, reported CNBC. Goldman Sachs reduced its 2022 full-year forecast to 3% from 3.3%, while Nomura trimmed its full-year projections to 2.8% from 3.3%.

Company News: Chinese internet giant NetEase Inc (NASDAQ: NTES) reported a 12.8% year-on-year revenue growth at $3.5 billion.

Li Auto has announced the Li L9, an intelligent flagship SUV, has officially rolled off the production line at the company’s Changzhou Base, and will be delivered across the country soon, reported Pan Daily.

The Shanghai Municipal Commission of Economy and Informatization has written a letter to Sichuan authorities asking them to prioritize access to power for 16 local suppliers of Tesla Inc. (NASDAQ: TSLA) and SAIC Motor Corporation Limited considering supply chain stability, reported Nikkei Asia. This has reportedly upset residents in Sichuan.

Global News: U.S. futures were trading in the red during Friday morning Asia session. The Dow Jones futures were down 0.06% while the Nasdaq futures shed 0.11%. The S&P 500 futures lost 0.12%.

Elsewhere in Asia, Australia’s ASX 200 gained 0.12%. Japan’s Nikkei 225 was up 0.16% while China’s Shanghai Composite index was down 0.06%. South Korea’s Kospi lost 0.36%.