Hong Kong stocks wavered between gains and losses as China’s gross domestic product data (GDP) showed recovery in the world’s second largest economy was on track, while sentiment remained cautious as the intensifying Israeli-Hamas war sent oil prices higher and posed a risk to global economic growth.
The Hang Seng Index dropped 0.2 per cent to 17,746.81 at 11.30am local time, after gaining as much as 1 per cent early in the session. The Tech Index slipped 1.1 per cent, while the Shanghai Composite Index lost 0.6 per cent.
Tencent Holding slid 0.7 per cent to HK$300.20 while Baidu retreated 3 per cent to HK$115.80. E-commerce platform operator JD.com tumbled 3 per cent to HK$102.80 while Meituan lost 0.5 per cent HK$113.90.
Electric vehicle maker BYD surged 7 per cent to HK$257.60 and its peer Geely Auto jumped 1.8 per cent HK$9.43. Sportswear maker Anta rose 1.2 per cent to HK$92, and oil giants CNOOC, PetroChina and Sinopec posted gains of between 0.7 per cent and 1.3 per cent.
Official data released on Wednesday showed China’s economy continued to recover, with gross domestic product expanding a consensus-beating 4.9 per cent in the third quarter from a year earlier. Meanwhile industrial output and retail sales grew by 4.5 and 5.5 per cent, respectively, and both data points were higher than expected.
But economists are advising investors to keep euphoria in check as the property sector still poses material risks to the Chinese economy.
“Don’t pop the champagne just yet,” said Harry Murphy Cruise, economist at Moody’s Analytics. “The property market’s capitulation is ongoing. Given the sector’s outsize importance—roughly 30 per cent of China’s economy is linked to real estate—broader investment activity is being held back.”
Cruise highlighted the 9.1 per cent decline in real estate investments in the first nine months of the year with the retreat gathering pace each month.
The offshore Chinese yuan climbed 0.2 per cent to 7.3081 per dollar to reverse earlier losses after GDP data beat estimates.
Traders are also monitoring US President Joe Biden’s visit to Israel on Wednesday to gain insights as to the impact it could have on regional tensions. Israel’s military spokesman said it is preparing for the next stages of the war against the Palestinian extremist organisation Hamas in the Gaza Strip.
Elsewhere, US Treasury yields surged to new highs after strong retail sales data, which reinforced the case for the Fed to keep rates higher for longer. Two-year US yields climbed to 5.19 per cent, the highest since 2006.
Key Asian markets were broadly lower. South Korea’s Kospi added 0.1 per cent and Japan’s Nikkei 225 slipped 0.2 per cent. Australia’s S&P/ASX 200 gained less than 0.1 per cent.
