Hong Kong stocks stumble after 2 days of gains as investors await policy signals

The Hang Seng Index fell 1 per cent to 25,842.77 at the noon break, poised to end a two-day streak of gains. The Hang Seng Tech Index dropped 1.3 per cent.

On the mainland, the CSI 300 Index was little changed and the Shanghai Composite Index retreated 0.1 per cent.

Alibaba Group Holding sank 2 per cent to HK$153.90 and Tencent Holdings lost 1.1 per cent to HK$610.50. Online game operator NetEase retreated 3.3 per cent to HK$217 and bottled water maker Nongfu Spring declined 2.6 per cent to HK$48.06. China Construction Bank lost 3.2 per cent to HK$7.90 after trading ex-dividend, with investors who bought the stock from Wednesday onwards not entitled to an interim dividend of 0.1858 yuan per share.

Caution returned to the market after a recovery in risk appetite spurred a rebound in Hong Kong stocks alongside global equities. Investors are now gearing up for the coming policy meetings by the US Federal Reserve and the Bank of Japan in the coming weeks, with rate decisions expected to have a pronounced impact on global capital flows.

“Hong Kong stocks will face some external disruptions in the near term,” said Zhang Sida, an analyst at Guoyuan International. “A rate cut in the US isn’t a done deal yet before the release of economic data, and Japan’s central bank has a very hawkish tone.”