Hong Kong stocks snap six-day winning streak as weak China inflation reports undermine recovery bets
- Stock benchmark slips from a five-week high as bullish China bets take a knock following weak reports on producer, consumer prices in China
- Market is still on course for a 2.1 per cent gain for the week, courtesy of a rally in the preceding six days amid speculation on state-fund buying
The Hang Seng Index declined from a five-week high, losing 2.1 per cent to 17,852.85 at the local noon trading break. The index was still headed for a 2.1 per cent gain in week, courtesy of rally in the preceding six days. The Tech Index slumped 3.2 per cent and the Shanghai Composite Index retreated 0.6 per cent.
Alibaba Group retreated 3.4 per cent to HK$82.90 and rival e-commerce platform operator JD.com slumped 12 per cent to HK$103.50. Jewellery retailer Chow Tai Fook lost 5.2 per cent to HK$10.96 while Meituan slipped 3.9 per cent to HK$113.80. Search engine operator Baidu sank 5.2 per cent to HK$124.70.
“Inflation may still see some weakness going forward because of base effect and external uncertainty,” said Bruce Pang, chief economist at Jones Lang LaSalle in Hong Kong. “Fiscal policies need to be ramped up to make up for inadequate aggregate social demand.”
China’s sovereign fund raises stake in Big Four banks in boost to stock market
Elsewhere, China’s Big Four lenders retreated, surrendering some of their big gains overnight. Several incremental market purchases in the bank stocks by the nation’s US$1.35 trillion sovereign wealth fund on Wednesday had fuelled talks Beijing is intervening to shore up confidence in the market.
ICBC, the largest of them, dropped 1 per cent to HK$3.88, while Construction Bank slipped 0.6 per cent to HK$4.66. Bank of China lost 0.7 per cent to HK$2.83 and the Agricultural Bank of China also declined 0.7 per cent to HK$2.99.
One stock started trading on Friday. Inner Mongolia Chevalese Dairy Group dropped 11 per cent to 4.45 yuan in Beijing.
Other major Asian markets weakened. South Korea’s Kospi retreated 1 per cent and Australia’s S&P/ASX 200 lost 0.4 per cent, while Japan’s Nikkei 225 slipped 0.4 per cent.