(Bloomberg) -- Chinese equities listed in Hong Kong fell by the most in two months, as a raft of disappointing earnings undermined expectations for a strong market recovery.

The Hang Seng China Enterprises index slid as much as 3.5%, while the onshore benchmark CSI 300 Index halted a five-week rally. The yuan dropping to a four-month low also sapped risk sentiment.

The rebound in Chinese equities that started in early February appears to be running out of steam, with investors seeking strong corporate performance for the rally to sustain. Earnings performance so far has done little to allay investors’ concerns.

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Chinese electric vehicle maker Li Auto Inc. was among the worst performers Friday after it lowered guidance for the first quarter, while the worse-than-expected results from Ping An Insurance Group Co., Longfor Group Holdings Ltd. and CK Asset Holdings Ltd. have added to worries about earnings from the nation’s biggest financial institutions and property developers due next week.

“I suspect it is the weak yuan reading and concerns over property sector following soft Longfor results and ongoing doubt over solvency of Vanke that’s weighing today,” said Xin-Yao Ng, director of investment at abrdn. 

Ping An Insurance dropped the most in over a year after its net income lagged behind expectations, while Longfor Group drop as much as 5.5%. CK Asset fell the most on record as analysts rushed to downgrade the stock after the company cut its dividend payout. 

While data this week showed that the economy is recovering, the property sector remains a major drag. Housing sales plunged 33% by value in the January-February period from a year earlier.

Developers Country Garden Holdings Co. and China Vanke Co. have been battling cash crunches and, while Vanke secured a loan to avoid a default, its woes have shaken investor confidence as it had been regarded as one of the more stable players. Earnings from the two of the biggest troubled developers next week will show the extent to which the nation’s property woes are hurting the world’s second-largest economy.

--With assistance from Mengchen Lu.

(Updates throughout)

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