China stocks fall on slowdown jitters while Hong Kong markets are shut on typhoon Kompasu warning

  • Stocks drop for a third day. led by energy producers, as Beijing seeks to restore more power supply to meet industry demand
  • Hong Kong Observatory says No 8 typhoon warning signal to remain up to 4pm local time as Kompasu edges closer to the city

Stocks in mainland China dropped for a third day as traders weighed the mixed data on foreign trade while an ongoing energy crisis stoked worries about recovery outlook. Hong Kong’s financial markets are shut due to severe weather conditions.

The Shanghai Composite Index retreated 0.4 per cent to 3,534.43 at the break on Wednesday. The CSI 300 Index, which tracks the biggest companies on the Shanghai and Shenzhen bourses, added 0.3 per cent.

Coal producer China Shenhua Energy and PetroChina led energy stocks lower as fear of an energy crunch receded, with top officials in Beijing calling for more power supply to meet demand. Offcn Education Technology and other vocational education tutors rallied after the State Council encouraged listed companies to engage in the industry.

China’s September data foreign trade data offered a mixed picture, with exports rising by faster-than-estimated 28.1 per cent and imports growing 17.6 per cent that trailed projections. BlackRock, the world’s biggest money manager, said this week that China can no longer ignore slowdown signs without easing policies.

Pedestrians walk past a stock ticker outside the Exchange Square, which houses the Hong Kong Stock Exchange in Central on October 4. Photo: EPA-EFE


“Both numbers [on imports and exports] need to perform though, or else the China slowdown gremlins will win the day, and that is likely to weigh further on China equities,” said Jeffrey Halley, an analyst at Oanda. “The governments “shared prosperity” drive will continue to be a headwind for China equities going forward.”

A gauge of energy stocks on the CSI 300 slid 5.2 per cent, making it the biggest loser among all the 10 industry groups. The measure had risen more than 20 per cent over the past two months following a global surge in oil and natural gas prices. Shenhua, China’s biggest coal producer, lost 4.2 per cent to 21.30 yuan and Shaanxi Coal Industry sank 6.5 per cent to 13.88 yuan. PetroChina slumped 5.2 per cent to 5.69 yuan.

Springsnow Food Group, a maker of chicken products based in the east province of Shandong, jumped by the 44 per cent daily limit to 16.99 yuan on the first day of trading in Shanghai.

Financial markets in Hong Kong are shut for the day after the Observatory retained its No. 8 typhoon warning signal up to 4pm local time as Kompasu edges closer to the city. Banks will also close for the day.

Other major markets in Asia were mixed, with the benchmarks in Japan and Taiwan retreating and those in South Korea and Australia rising. US stocks fell overnight as traders waited for the start of the corporate earnings report season.

Author: Zhang Shidong, South China Morning Post

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