HK stocks slide as Fed takes no measures to tame bond yields, China offers mixed bag of plans to support growth

06-Mar-2021 Intellasia | South China Morning Post | 6:49 AM Print This Post

Hong Kong and China’s stocks both dropped for a second day, extending losses from a sell-off in global equities as the Federal Reserve stopped short of moves to stem rising bond yields. China began the “Two Sessions” meeting with a mixed bag of targeted stimulus and policy squeeze.

The Hang Seng Index slid 1.5 per cent to 28,806.50 on early Friday trading. The benchmark was headed for a second straight weekly loss with a 0.6 per cent setback.

Technology stocks bore the brunt of the selling, with Techtronic Industries and WuXi Biologics crashing by at least 4 per cent. PetroChina added 2.8 per cent after OPEC announced plans to keep output unchanged.

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The Shanghai Composite Index lost 1.3 per cent. The National People’s Congress, or China’s annual legislative meeting, kicked off on Friday. In a work report delivered by Premier Li Keqiang to delegates on the opening session, China set a lower threshold on economic growth for 2021 at “above 6 per cent,” below most economists’ estimates.

Global stocks suffered a jolt this week as Fed Reserve Chair Jerome Powell refrained from mentioning any specific measure to keep a lid on US government bond yields. Equity gauges from Australia to Japan and South Korea retreated by at least 1 per cent on Friday, while the S&P 500 erased this year’s gain in overnight trading and the yield on 10-year Treasuries climbed above 1.5 per cent.

Higher bond yields are stoking panic among stock traders, who view it as a sign that inflation will accelerate and central bankers will start to mop up excessive liquidity that has sent stocks to records.

Chinese Premier Li Keqiang unveiled his work report that included measures to boost lending to small businesses by over 30 percent in 2021, step up R&D spending by more than 7 per cent over five years. He also cautioned against property-market speculation, saying the government will increase land supply and stabilise prices.

https://sg.news.yahoo.com/hong-kong-stocks-slide-fed-030326202.html

 

Category: Hong Kong

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