Hong Kong Stocks Fall on Weak China Data; Alibaba and Tencent Lead Losses
Hong Kong stocks fell as China's lacklustre economic data triggered a sell-off, while the US Federal Reserve's imminent easing cycle and bets that Beijing will roll out more stimulus helped limit losses.
The Hang Seng Index lost 0.1 per cent to 17,344.26 as of 11.20am local time, while the Tech Index declined 0.2 per cent. Mainland markets are closed through Tuesday for a holiday.
E-commerce company Alibaba Group Holding lost 1.3 per cent to HK$81.70, rival JD.com dropped 2 per cent to HK$102.20, while Tencent weakened 0.3 per cent to HK$373.60. EV giant BYD slipped 0.3 per cent to HK$239, while developer China Resources Land tumbled 4.5 per cent to HK$18.72.
Chinese industrial production, retail sales and fixed asset investment all fell short of expectations for August, while home prices reported their steepest annual decline in nine years. Meanwhile, August credit growth also eased, led by a sustained decline in demand among households and companies.
"It's becoming harder to ignore the flashing red lights," Stephen Innes, managing director at SPI Asset Management said in a note on Sunday. "China's economy isn't just resting; it's in a full-on comatose state with consumer demand gridlocked."
The disappointing data highlighted an urgency to step up policy easing and boost domestic demand with growth targets now at risk. The People's Bank of China (PBOC) could deliver a 50-basis-point cut in banks' reserve requirement ratio (RRR) in the coming weeks - likely this month - followed by another cut of half a point in the first half of next year, according to Barclays.
The expected policy easing from the Fed this week is also expected to offer more wiggle room for the PBOC and help with the liquidity situation in Hong Kong's stock market. Traders are pricing in a 50 per cent chance of a half-point cut at the September meeting, according to CME FedWatch.
Source: SCMP
