HK and China stocks tread lower as investors worry over economic outlook

14-Mar-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Hong Kong and China stocks edged lower in early trading on Wednesday as uncertainties over the mainland’s economic outlook resurfaced.

The benchmark Hang Seng Index fell 150 points, or 0.5 per cent, to 28,771.56, after rising 400 points gain in the previous session.

The Shanghai Composite Index was marginally lower, losing 2.35 points, or 0.08 per cent to 3,057.96. As of Tuesday the index had gained about 23 per cent thus far this year, making it the world’s best performing equity gauge this year.

The CSI 300 of top stocks listed on the Shenzhen and Shanghai stock exchanges also edged down 13.98 points, or 0.4 per cent, to 3,741.37

Traders said uncertainty surrounding the slowdown in China’s economic growth, which has been compounded by the uncertain outcome of the ongoing US-China trade negotiations, could slow down the markets’ momentum seen in the previous two months.

“The recent economic data released in China over the past two months has not been entirely rosy, and yet investors have largely shrugged this off and continued to chase up the market,” said Castor Pang, head of research at Core Pacific-Yamaichi. “I don’t see these uncertainties going away in the short term. The key point is that there has been too much bullishness in the market.”

Last Friday, Beijing reported worse-than-expected trade data for February, as both dollar-denominated exports and imports missed economists’ forecasts, falling 20.7 per cent and 5.2 per cent, respectively from a year ago.

Overnight, US trade representative Robert Lighthiser said in Washington that trade negotiations with Beijing had entered their “final weeks”.

He said he expected to have another round of negotiations with Chinese officials on Wednesday, as both sides try to reach an agreement that would reverse tariffs on about $360 billion of Chinese goods that have been in place since July.

“Over the short term, I think Chinese investors would still be eyeing potential measures by the Chinese government to bolster the economy and Chinese economic data rather than the comments from US government officials on the status of the trade war negotiations,” said Pang.

Investors are also awaiting the release of industrial production, retail sales and fixed-asset investment data for January and February on Thursday by the National Bureau of Statistics, which will provide a clearer picture of the health of economy.

In Hong Kong, selective financial stocks bucked the downward trend. AIA was up 1.9 per cent at HK$78.3.

Ping An Insurance gained 2.1 per cent to HK$84.85 after the company reported on Tuesday a 20.6 per cent jump in net profit to 107.4 billion yuan, beating consensus expectation of 97.48 billion yuan polled by Bloomberg.


Category: Hong Kong

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