Hong Kong stocks waver around 11-year low amid thin pre-holiday trading as property developers rise on Beijing support

  • Chinese developers advance after Beijing announces mortgage-rate cut to shore up property market
  • Alibaba Group rebounds from a six-month low as tech stocks regain footing in punishing week

Hong Kong stocks swung between gains and losses, with the benchmark hovering around an 11-year low. Traders remained cautious ahead of a week-long holiday for the mainland markets, while an official report showed an expansion in China’s manufacturing and Beijing took action to shore up the property market.

The Hang Seng Index rose 0.1 per cent to 17,174.01 as of 11.16am local time, giving up a gain of as much as 1 per cent. For the month, it has tumbled 14 per cent, set for the worst monthly performance since September 2011. The Tech Index slid 1.4 per cent, while the Shanghai Composite Index lost 0.2 per cent.

Chinese Developers rallied after the central bank eased mortgage financing rates for home purchases to shore up the industry. Country Garden jumped 8.4 per cent to HK$1.81, while peer China Resources Land added 1.3 per cent to HK$30.70. Alibaba Group Holding climbed 0.7 per cent to HK$77.40, recovering from a six-month low.

Limiting the gain, garment maker Shenzhen International sank 4.4 per cent to HK$60.50, and sportswear maker Li Ning fell 3.5 per cent to HK$61.95. Meituan slid 3.2 per cent to HK$164.80.

Trading was thin in the run-up to the National Day holiday, also known as golden week, as traders are positioned for light holdings to navigate through uncertainties during the market closure. Trading volumes on the Hong Kong exchange were 14 per cent below the 30-day average for this time of the day, while those on the Shanghai bourse were 7.5 per cent lower, according to Bloomberg data. Hong Kong’s market will be shut on October 4 while the mainland’s will be closed for the whole of next week.

“The risk-off sentiment is on the increase as the market is wary of the risks from overseas during the holiday,” said Li Lifeng, a strategist at Huaxi Securities in Shanghai. “It still takes time for the market to stabilize and the confidence to recover. The external risk such as interest-rate increases and a slumping US stock market have been the factor that’s weighing on the risk appetite.”

Better-than-expected China economic data averted a sell-off on local stocks. An index tracking Chinese manufacturing expanded to 50.1 in September, the statistics bureau said on Friday. The reading was better than the consensus for a contraction to 49.7 among economists tracked by Bloomberg, after it shrank in July and August.

Other key benchmarks all declined in Asia on Friday. Japan’s Nikkei 225 slumped 1.7 per cent, Taiwan’s Taiex lost 1.1 per cent and Australia’s S&P/ASX 200 dropped 0.7 per cent. That followed turbulent overnight trading in the US where concerns about an economic recession deepened.

Author: Zhang Shidong, SCMP

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