Hong Kong stocks fall to five-week low as traders look to Xi at China forum for clues on economy, policy easing impetus

  • Stocks headed for a third day of decline in Hong Kong as market struggles for clues on policy easing impetus from Beijing
  • CNOOC surges in Shanghai debut after a US$4.3 billion offering to trade at 56 per cent premium over its own Hong Kong-listed shares

Hong Kong stocks fell for a third day to a five-week low as traders struggle for policy easing signs from China’s top leadership amid economic losses caused by its zero-tolerance Covid-19 strategy.

The Hang Seng Index retreated 1.6 per cent to 20,611.55 at 11.20am local time, the lowest level since March 16. The Tech Index tumbled 3.3 per cent while the Shanghai Composite Index declined 1.6 per cent.

Alibaba Group Holding lost 3.1 per cent to HK$87.90 while JD.com fell 5 per cent to HK$209.90 and Meituan tumbled 6.4 per cent to HK$135.60. Tencent and NetEase weakened by at least 3 per cent each.

President Xi Jinping is set to deliver a speech via a video link at the annual Boao Forum in southern Hainan province which ends on Friday, according to local news agencies. This year’s theme is centred on the Covid-19 pandemic, which has threatened to freeze economic activity in key manufacturing and technology hubs.

Xi may offer clues on the state of the economy as the Omicron wave forced authorities to lock down Shenzhen, Shanghai and other hubs across the country at various times, shutting factories and causing supply-chain disruptions for carmakers like Li Auto, Xpeng and Tesla.

Expectations of stronger policy-easing measures have gained traction amid market disappointment, after the central bank offered a token 25-basis point cut in banks’ reserve ratio last week and commercial banks refrained from lowering their lending rates this week.

Shanghai’s new daily Covid-19 cases fell to the lowest in 15 days after three weeks of a citywide lockdown. Local authorities are now focusing on preventing spillover of the disease from spilling beyond the highest-risk areas and hospitals into the community.

Li Auto slumped 4.5 per cent to HK$93.80. The carmaker said it would delay the delivery of new cars due disruptions caused by pandemic control measures, the company said on its mobile website.

Local stocks failed to revive even as Hong Kong started easing of some social-distancing restrictions from Thursday. Hotel quarantines remain and airlines still face potential suspensions for carrying three or more infected passengers, leaving its borders relatively closed.

China’s biggest oil explorer CNOOC surged 28 per cent to 13.79 yuan on the first day of trading in Shanghai following a stock offering that raised 28 billion yuan (US$4.3 billion) of proceeds. That equals to a 56 per cent premium over its Hong Kong-listed shares, versus the market average of 41.5 per cent.

Two other Chinese firms sank on their trading debuts in Shenzhen. Hubei Zhongyi Technology slumped 25 per cent, while Xiamen Jiarong Technology Company slid 18 per cent.

Markets in Asia rose on Thursday. Japanese stocks gained 1.2 per cent while Australian and South Korean shares increased by at least 0.5 per cent.

Author: Cheryl Heng, SCMP

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