Hong Kong stocks waver at 4-week low as CNOOC benefits from oil rally, Alibaba and Anta suffer on Shanghai lockdown

  • Stocks struggle to break out from a four-week low as Shanghai infections hit a record, dimming hopes for a quick exit from lockdown
  • US consumer prices jumped in March by the most in four decades, further entrenching Fed tightening bias

Hong Kong stocks wavered near a four-week low after new Covid-19 cases rose to a record in Shanghai, denting hopes for a quick exit from two weeks of citywide lockdown. Faster US inflation also fuelled more policy tightening bets.

The Hang Seng Index added 0.2 per cent to 21,352.98 at the local noon trading break, after earlier losing as much as 0.8 per cent. Volatility this week reached the highest in about a month. The Tech Index gained 0.1 per cent and the Shanghai Composite Index fell by 0.4 per cent.

CNOOC and PetroChina surged after crude oil futures topped US$100 a barrel as Russia vowed to press on with its Ukraine invasion. Alibaba Group Holding dropped 0.3 per cent to a one-month low of HK$98.75. WuXi Biologics, Anta Sports and Lenovo fell more than 1.5 per cent.

“There’s a lack of confidence in the market given the economic damage from lockdown measures imposed in many parts across China,” Ping An Securities said in a report on Wednesday. “Hong Kong’s market would be no exception to wild price swings, even if the valuation is already beaten down.”

Shanghai recorded 26,330 of infections on Tuesday, a new daily record, according to the data released by the health authorities on Wednesday. The financial hub, home to Tesla’s Gigafactory, contributed to more than 95 per cent of current cases nationwide. The city of 25 million people has been in a two-phased lockdown since March 28.

The crisis in Shanghai will reinforce expectations that China’s economic growth is being further derailed as the nation’s zero-Covid policy and sporadic lockdowns forced factories to shut down while transport disruptions upended supply chains. Pimco is the latest to trim its GDP forecast for 2022.

Alibaba, the owner of the newspaper, slipped 0.5 per cent to HK$98.55, near the lowest close since March 16. WuXi Biologics slid 3.3 per cent to HK$60.60 and Lenovo Group sank 2.3 per cent to HK$7.60.

CNOOC rallied 4 per cent to HK$11.50 and PetroChina added 3 per cent to HK$4.07, both benefiting from an overnight rally in crude oil. Russia vowed to continue its war against Ukraine after recent talks reached a dead end.

In the US, consumer prices rose 8.5 per cent in March, the fastest pace in four decades and beating market consensus, the government said. The report heightened concerns the Federal Reserve will raise interest rates even faster, undermining risk appetite.

Author: Zhang Shidong, SCMP

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