HK stocks pause rally before local job report, Asian markets decline after US losses

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

Hong Kong stocks struggled for fresh impetus on Tuesday morning, pausing a three-week rally before a government report signalling further weakness in the local employment market. Most equity markets in Asia-Pacific region retreated after a sell-off in US stocks overnight.

The Hang Seng Index was 0.1 per cent weaker at 24,520.34 at midday break, having traded between gains and losses in the morning. The CSI300 index, which tracks the biggest companies on Shanghai and Shenzhen bourses, rose 0.2 per cent to 4,763.56, arresting a 1.7 per cent slide in the past four trading days.

In Hong Kong, oil companies led the drop amid renewed concerns about more global oil supply from OPEC members. CNOOC shed 1.9 per cent and PetroChina lost 0.9 per cent. Banks and local property companies also fell. Bank of China dropped 1.3 per cent while Sun Hung Kai Properties eased 1.1 per cent.

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On the mainland, beer producers were the big gainers. Fujian Yanjing Huiquan Brewery surged by the daily cap of 10 per cent. Beijing Yanjing Brewery jumped 4.5 per cent. Chip makers were among the big losers after authorities signalled tightening regulations on inefficient expansion driven by local governments. China Resources Microelectronics plunged close to 12 per cent.

“Sentiment is quite neutral as investors do not have a specific direction to trade when lacking special news,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai. Hong Kong stocks are in a “range trading” period with index locked between 24,000 and 25,000, he added.

Benchmarks in Japan and Australia declined by about 0.4 per cent and 0.8 per cent respectively, while South Korea’s Kospi retreated by 0.6 per cent. Deadlock in US stimulus talks pummeled US equities overnight, with the S&P 500 Index losing 1.6 per cent, the most since September 23, according to Bloomberg data.

In Hong Kong, the government is expected to release the September job market later today. Unemployment is expected to climb to 6.2 per cent, according to Bloomberg consensus, versus 6.1 per cent in August. A separate report on Monday showed tourist arrivals slumped 99.7 per cent in September from a year earlier.

The city is also bracing for a possible fourth wave of Covid-19 cases this winter at a time when private doctors are facing flu vaccine shortages.

Before today, The Hang Seng Index has risen 5.5 per cent, fuelled by hot money inflows in anticipation of Ant Group blockbuster stock offerings in Shanghai and Hong Kong. The rally over the past three weeks has been the longest stretch since January.

Alibaba hit an intraday high of HK$299.40 on Monday, on the back of its $3.6 billion purchase of additional stake in Sun Art Retail Group, China’s largest hypermarket operator. The rise has added to the fortune of Jack Ma who tops Chinese billionaires in the latest list published by Hurun Report.


Category: Hong Kong

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