Hong Kong stocks were heading for a loss in the first week of 2024, as a slowdown in China’s growth and longer than expected policy tightening in the US dented sentiment.
The Hang Seng Index fell 0.1 per cent to 16,622.45 at the noon break, on course for a 2.5 per cent decline in the curtailed four-day trading week. The Hang Seng Tech Index dropped 1.1 per cent, while the Shanghai Composite Index slipped 0.1 per cent.
Alibaba Group Holding slid 3 per cent to HK$71.85 and Tencent Holdings lost 2.1 per cent to HK$292.60. Chinese electric-vehicle maker Xpeng retreated 2.7 per cent to HK$53.45 after HSBC Holdings cut its earnings estimates for this year and next by 35 per cent and 42 per cent, respectively, because of rising pricing pressure. China Resources Beer declined 4.1 per cent to HK$30.65 and personal computer maker Lenovo Group shed 2.4 per cent to HK$10.44.
The latest US jobs data poured cold water on imminent and aggressive cuts in interest rates, as jobless claims were lower than expected in December and companies increased hiring. Earlier, the minutes from the Federal Reserve indicated interest rate cuts would not be as fast as expected.
Meanwhile, an official report showed China’s manufacturing industry contracted for a third straight month in December and declines in home sales of the nation’s biggest developers deepened last month.
“Hong Kong stocks are still under pressure fundamentally,” said Vincent Ji, analyst at ICBC International in Hong Kong. “Global markets, particularly US stocks, have fully priced in expectations about the rate cuts, so the rallies will take a breather from here. All eyes will be on China’s property market to see if there are any signs of a recovery after all the loosening measures.”
This week’s slump in the Hang Seng Index extends a 14 per cent plunge last year, an unprecedented fourth straight annual decline. The loss coincides with a pause in the rally in global markets as traders reassess policymakers’ fight to tame inflation.
Anta Sports Products added 0.9 per cent to HK$70.90 after its retail sales increased by as much as 65 per cent last year and its subsidiary Amer Sports applied for a listing in New York.
Two companies made their trading debuts. RoboSense Technology, which makes lidar sensors, dropped 2.1 per cent to HK$42.10 in Hong Kong. Auto accessory maker Zhejiang Jiezhong Science and Technology jumped 136 per cent to 22.03 yuan in Beijing.
Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 0.7 per cent, Australia’s S&P/ASX 200 was little changed and South Korea’s Kospi lost 0.3 per cent.
