China stocks slip, HK market erases losses amid market volatility, US stimulus impasse before election

24-Oct-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

China stocks slipped while the Hang Seng Index rebounded from earlier losses to extend a rally amid concerns about political tension and US stimulus impasse before the presidential election on November 3.

The CSI300 Index, which tracks the biggest companies in Shanghai and Shenzhen, declined 0.3 per cent to 4,777.98. The Hang Seng Index ended with 0.1 per cent gain at 24,786.13 as casino and bank stocks helped stabilise the market from earlier losses.

Asian stocks followed US markets lower with steep losses in Japan and South Korea on speculation talks for a trillion-dollar virus-relief package will not be ready before the poll. At the same time, the US also accused Iran and Russia of trying to interfere with its presidential election.

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“With investors suffering a severe case stimulus talk exhaustion, more and more market participants opt for the sidelines to avoid the steam rollers known to the pancake markets in low volume conditions,” said Stephen Innes, a strategist at Axi. “The pre-election fiscal stimulus’s odds continue to look very low.”

The US yesterday designated another six lesser known Chinese media as “foreign missions” in another sign of escalation in political tension leading up to the election.

Vaccine producers were the biggest losers. Shanghai Fosun Pharmaceutical Group shed 5.2 per cent per cent. Shenzhen Kangtai Biological Products dropped 4.8 per cent.

In new listings, Guangzhou Metro Design & Research Institute jumped by the maximum limit to 19.34 yuan. Shenzhen Consys Science & Technology more than doubled to 219.51 yuan.

Traders in mainland stocks are also looking ahead to the Fifth Plenum of the 19th Communist Party Congress next week, which will chart China’s economic development for the next five years.

In Hong Kong, Sands China added 5.2 per cent and Galaxy Entertainment gained 5.1 per cent. Industrial and Commercial Bank of China rose 2.6 per cent while the Bank of Communications climbed 2.3 per cent.

Telecommunications companies were the biggest losers, as China Unicom slumped 11.5 per cent and China Mobile shed 2.7 per cent. Cathay Pacific Airways slumped 3.4 per cent to HK$5.65, losing all of the rally on Wednesday on the back of its HK$2.2 billion (US$284 million) restructuring that includes a record job cuts.

Alibaba Group, the owner of this newspaper, dropped less than 0.1 per cent to HK$300. China’s top security regulator approved the Shanghai leg of fintech unicorn Ant Group’s initial public offering on Wednesday, the final hurdle for what is likely to be the world’s biggest IPO ever.

The timetable however suggests the stock will not trade before Americans elected their new president for the next four years.

“The Hong Kong market is tracking declines in the US as the stimulus package lacks progress, while some investors may take profit and turn cautious before the US election,” said Carl Cai, analyst at SPDB International. The Hang Seng Index will see more fluctuations in the next two weeks, he added.

https://sg.news.yahoo.com/china-hong-kong-stocks-slide-032522024.html

 

Category: Hong Kong

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