Hong Kong stocks slip as China’s gloomy economic outlook spooks investors
Hong Kong stocks fell in early deals on Tuesday as China’s economic gloom punctured investor sentiment, with major investment banks downgrading their economic projections for the world’s second largest economy.
The Hang Seng Index slipped 1.3 per cent to 17,786.72 at 10am local trading time. The Hang Seng Tech Index declined 1.4 per cent, while the Shanghai Composite Index was unchanged.
Logistics company Orient Overseas International fell 5.6 per cent to HK$108, travel giant Trip.com slid 3.4 per cent to HK$375.20 while sportswear brands Li Ning retreated 3.4 per cent to HK$14.90 and Anta Sports declined 2.4 per cent HK$72.50.
Economic data released on Monday showed growth momentum had weakened, leading to many major banks to trimming their GDP forecasts. Barclay’s cut their China GDP forecast to 4.8 per cent from 5 per cent, Goldman Sachs reduced theirs to 4.9 per cent from 5 per cent and JPMorgan downgraded it to 4.7 per cent from 5.2 per cent.
“We are cautious about the second half”, as growth momentum weakens due to the sustained housing crisis with Beijing yet to execute a plan to complete the millions of unfinished pre-sold homes, analysts at Nomura including Ting Lu said in a note on Tuesday.
Ping An Insurance fell 4.3 per cent to HK$34.50 after it announced the sale of a US$3.5 billion convertible bond in an exchange filing this morning. Tech stocks mostly declined, as Baidu fell 2.4 per cent to HK$91.65, Alibaba dropped 1.4 per cent to HK$75.55 and Tencent retreated 1.5 per cent to HK$384.40.
Other major Asian markets were mixed. Australia’s S&P/ASX 200 slipped 0.2 per cent and South Korea’s Kospi was flat. Japan’s Nikkei 225 climbed 0.4 per cent.
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