Tech Giant Baidu Falls 7% On Revenue Drop: Chinese PMI Data, Sluggish Wall Street Drag Hong Kong Stocks

Hong Kong stocks opened in the red on Wednesday following a sluggish session on Wall Street as central bankers in the U.S. and Europe continued to maintain their hawkish tones. Shares of Baidu fell over 7% in opening trade after the company reported second-quarter earnings.

The Hang Seng Index lost 1.45% at the open as China’s factory activity shrank for the second straight month, led by a rise in COVID-19 cases and power rationing.

The official manufacturing Purchasing Managers' Index (PMI) stood at 49.4 in August as against 49 in July, Reuters reported, citing data from the National Bureau of Statistics. The 50-mark separates contraction from expansion.

Macro News: In an unprecedented response, Taiwan fired shots at a Chinese drone after it re-entered the island’s airspace above the Quemoy archipelago, the South China Morning Post reported. The move comes after the Taiwanese leader’s vow the island’s military would act against ‘Chinese provocations’, it said.

China’s ruling Communist party is set to commence its 20th congress on October 16, a meeting at which President Xi Jinping is likely to be anointed the nation’s most powerful leader in decades, The Guardian reported citing state media.

Company News: Industrial and Commercial Bank of China Limited IDCBY, the world’s biggest bank by assets, reported a 4.9% rise in its net income to $24.8 billion for the six months ended June.

Baidu Inc BIDU on Tuesday reported a second-quarter revenue decline of 5% to $4.43 billion, although it beat the consensus estimate of $4.20 billion.

Top Gainers and Losers: Country Garden Services Holdings Company Ltd was the only gainer among the top 30 constituents of Hang Seng, up by 0.79%. Alibaba Group Holding Ltd and WuXi Biologics (Cayman) Inc. were the top losers, losing over 3.5%.

Global News: U.S. futures traded in the green on Wednesday morning Asia session. The Dow Jones futures were up 0.28%, while Nasdaq futures gained 0.35%. The S&P 500 futures were up 0.24%.

Elsewhere in Asia, Australia’s ASX 200 lost 0.38%. Japan’s Nikkei 225 was down 0.47%, while China’s Shanghai Composite index lost 0.17%. South Korea’s Kospi shed 0.48%.