Doubts on Chinese search engine halt stock rally

A sign of things to come? One downbeat report about China's biggest search engine company now has the power to shake the U.S. stock market: The Hang Seng Index in Hong Kong breached 29,000 for the first time, taking its gains for the year to 46 per cent. Almost all of this has been achieved ...

A sign of things to come? One downbeat report about China's biggest search engine company now has the power to shake the U.S. stock market:

A sign of things to come? One downbeat report about China's biggest search engine company now has the power to shake the U.S. stock market:

The Hang Seng Index in Hong Kong breached 29,000 for the first time, taking its gains for the year to 46 per cent. Almost all of this has been achieved since August 20, when Chinese authorities announced plans to allow Chinese retail investors to invest there. Indices in China, Australia, South Korea, Singapore, Indonesia and India set new highs.

The momentum carried over to Europe and, initially, the US. The FTSE 100 rose 91.5 points, or 1.4 per cent, to close at 6,724.5, just eight points shy of a seven-year high reached on June 15. On Wall Street, the S&P 500 and the Dow Jones Industrial Average were trading at record highs at noon.

But investors grew nervous after JPMorgan lowered its sales estimates for Baidu.com, a Chinese search engine that had been described as China’s Google.

"People are throwing money at Baidu and similar companies across Asia," said Andrew Wilkinson, senior market analyst at Interactive Brokers. "It's a bit of a wake-up call, perhaps."

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