Hong Kong stocks weaken as China’s economic reports dent risk appetite while tech firms struggle on regulatory concerns
- Hang Seng Index declines 0.3 per cent as financial and tech stocks pace losses
- China’s economy grew less than expected 4.9 per cent last quarter, while factory production cooled last month amid a power crunch
Hong Kong stocks slipped as risk appetite waned after government reports showed China’s economy slowed more than market expected last quarter and manufacturing cooled last month amid a power crisis. Tech stocks retreated on regulatory concerns.
The Hang Seng Index fell 0.6 per cent to 25,175.15 as of 11am local time while the Shanghai Composite Index declined 0.3 per cent to 3,563.
Financial stocks led losses with Ping An Insurance and Industrial and Commercial Bank of China retreating by more than 1 per cent. China Merchants Bank declined 0.9 per cent.
The Hang Seng Tech Index slid 1.7 per cent, paced by 3.3 per cent loss in Meituan. Tencent Holdings dropped 1.7 per cent while Kuaishou slumped 5.5 per cent. China’s Ministry of Industry and Information Technology said it will deepen the scrutiny on internet companies under an ongoing six-month campaign.
China’s gross domestic product expanded 4.9 per cent from a year earlier, the statistics bureau said, trailing the consensus for a 5 per cent gain in a Bloomberg survey. The economy grew 7.9 per cent and 18.3 per cent in the preceding two quarters.
Other reports on Monday showed industrial production rose 3.1 per cent last month, versus a 3.8 per cent consensus estimate, reflecting the impact of an energy shortage in many provinces. Gain in retail sales was better than expected at 4.4 per cent.
China’s data dump offers one of several tests to stock investors grappling with a myriad of concerns in the economy, including shrinking corporate earnings and a slowdown in property sales amid debt defaults by indebted developers. Investors will look at China Evergrande Group crisis as the 30-day grace period for two interest payments ends later this week.
Three stocks began trading for the first time. In Shanghai, Beijing Fjr Optoelectronic Technology soared 90 per cent to 42.98 yuan in Shanghai while Beijing Asiacom Information Technology jumped 76 per cent to 37.86 yuan in Shenzhen and Acrobiosystems rose 54.8 per cent to 174.11 yuan.
Author: Iris Ouyang, SCMP